Yahoo data breach could affect Verizon deal: Verizon executive
15 Oct 2016
Verizon on Thursday signalled that the massive data breach at Yahoo that was disclosed three weeks ago could jeopardise its $4.8-billion acquisition of the tech firm's core business (See: Yahoo looking into claims of 200 mn hacked accounts being on sale). ''I think we have a reasonable basis to believe right now that the impact is material,'' Verizon general counsel Craig Silliman said of the breach, speaking to a small group of reporters at a roundtable. A ''material'' effect in the case could be understood as one that would harm Yahoo's hurt the value of the web giant.
According to commentators, this was the first time the company had publicly indicated having doubts about the acquisition. The sale to Verizon follows years of mismanagement by Yahoo executives who failed to keep up with developments leading up to the modern internet industry.
According to commentators, if the deal were to go through, it would bring to a close a rocky chapter in Yahoo's history.
The deal between Verizon and Yahoo is set to close in the first quarter. According to Verizon, the burden was on Yahoo to prove that the breach had not damaged its value."We're looking to Yahoo to demonstrate to us the full impact they believe it's not," Silliman said, Reuters reported.
Silliman added, Verizon had been preliminarily briefed on the incident by Yahoo, but expected more "significant information" before being able to determine the material effect. He concluded that Verizon "will make determinations about whether and how to move forward with the deal based on our evaluation of the materiality," Reuters reported.
Under a clause in the Yahoo acquisition agreement Verizon could withdraw in the case of an event that "reasonably can be expected to have a material adverse effect on the business, assets, properties, results of operation or financial condition of the business."
According to some analysts, Verizon might possibly look to get a better price.
"We are confident in Yahoo's value, and we continue to work towards integration with Verizon," a Yahoo spokesman told Reuters.