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Verizon (VZ) Inks Deal to Sell Media Business to Apollo for $5B

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Verizon Communications Inc. (VZ - Free Report) has inked a deal with Apollo Global Management, Inc. (APO - Free Report) to sell its media business — Verizon Media — for $5 billion.

Verizon will receive $4.25 billion in cash and preferred interests of $750 million. The deal covers Verizon Media’s assets, including its brands and businesses.

The transaction, subject to fulfillment of certain conditions, is expected to be closed in the second half of 2021. Post completion, Verizon will retain 10% stake in the company, which will be known as Yahoo and continue to be led by Guru Gowrappan.

Headquartered in New York, Apollo is a leading global investment manager. As of Dec 31, 2020, the firm had assets under management of about $455 billion.

Verizon Media comprises iconic brands such as Yahoo and AOL, and leading ad tech and media platform businesses. This carve-out will allow Verizon Media to aggressively pursue growth areas. Also, it will benefit advertisers, publishing partners and almost 900 million monthly active users worldwide.

The sale reaffirms Verizon’s focus on its core wireless business, where it is seeing solid demand for its services. The telecom giant’s disciplined network strategy for long-term sustainable growth, along with operational execution, is noteworthy.

Verizon is well positioned to capitalize on growth opportunities in a competitive market, with rivals like T-Mobile (TMUS - Free Report) and AT&T (T - Free Report) . It aims to retain the lead in promulgating 5G mobile networks nationwide by using virtualized machines and advanced levels of operational automation.

The company has built its 5G Ultra Wideband network to enable innovations that will support the changing behavior of customers. Its 5G mobility service provides an exceptional experience that impacts industries as diverse as public safety, healthcare, retail and sports.

Verizon expects to provide 5G Ultra Wideband service using C-band to 100 million people by the end of first-quarter 2022. It plans to cover more than 175 million people between 2022 and 2023.

By 2024 and beyond, more than 250 million people are likely to have access to Verizon’s 5G Ultra Wideband service on the C-band spectrum. The company’s focus on upgrading its network will enhance the speed and performance for better customer experiences.

Over the past year, Verizon’s shares have inched up 2.5% compared with 16.4% growth of the industry.




The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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