Verizon has announced that it’s buying AOL in a $4.4 billion all-cash-deal aimed at easing the way for the telecom firm to enter the mobile video and advertising market.
The offer values AOL at $50 per share, corresponding to a 17.4 percent premium on AOL’s Monday close of $42.59.
While AOL shares enjoyed a 18 percent rise in premarket trading, Verizon shares fell 1.6 percent.
“Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform,” Lowell McAdam, Verizon chairman and CEO, said in a press release.
“This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”
The deal, including the transferral of AOL’s $300 million debt, is expected to be completed in the summer months. Verizon will wholly own AOL’s brands –The Huffington Post, TechCrunch and Engadget– upon completion.
According to the same release AOL CEO Tim Armstrong, holding a 1.9 percent share in the company, will continue to run the company’s operations.