Verizon Communication looking to acquire AOL

Verizon entered into a deal to acquire AOL for $4.4 billion. The deal is expected to close this summer.

Verizon Communication is acquiring AOL Inc. in a deal worth of $4.4 billion in order to advance its growth targets in advertising and video on mobile, according to recent Verizon news.

The deal is valued at $50 per share, a premium of 23% over the company’s 3 month volume weighted average price. Shares of AOL grew 18% during pre-market session and reached $50.27. while Verizon shares decline by 1.49% and reached $49.

CEO and chairman of Verizon, Lowell McAdam said, "Verizon's vision is to provide customers with a premium digital experience based on a global multiscreen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience."

The deal will be finalized this summer and will receive a tender form offer followed by a merger, after that AOL will be completely owned by Verizon. The company said that is has planned to carry out the transaction with commercial paper and cash on hand, as reported by latest Verizon updates,

The United States wireless business has developed recently, leaving carriers such as AT&T , Verizon, and sprint Corp. continuously fighting to acquire market share from each other. Offering videos on wireless connections shows a growth in upcoming years for Verizon, which brought almost $127 billion in revenue and $12 billion in profit last year.

Verizon said, it is planning to introduce a video service emphasized on mobile phones this summer. The company has provided few details; however Fran Shammo, Chief Financial Officer of the company said the new video service will offer a blend of paid, free and ad- supported services and will not try to imitate conventional TV.

For AOL, the acquisition is the newest chapter for a firm that has reestablished itself in years recently as an important player in digital media & marketing, after originating as an inventor in Web access dial up business and being involved in the biggest devastating merger ever.

AOL ultimately grew to over 20 million dial up users and completed a $183 billion merger with Time Warner in the year 2000. The value of the company debauched rapidly followed by the global financial crisis and eventually Time Warner rolled out AOL in 2009.

CEO and chairman of AOL, Tim Armstrong will still be operating AOL after closing. He said, “Verizon is a leader in mobile and OTT connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers.

Verizon stock stood at $49.80 at market close on Tuesday.