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Verizon believes Yahoo data breach ‘material’, looking to renegotiate $4.8 billion acquisition

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U.S Telecom behemoth Verizon has finally answered the one question that we’ve all been expecting an answer to, since the surprising reveal of Yahoo’s deviant practices. At a public policy round table in Washington on Thursday, Verizon said that it has a ‘reasonable basis’ to believe that the massive e-mail data breach confirmed last month has had a ‘material’ affect on the merger deal.

During the meeting, Verizon’s general counsel Craig Silliman elaborately said,

I think we have a reasonable basis to believe right now that the impact is material and we’re looking to Yahoo to demonstrate to us the full impact. If they believe that it’s not, then they’ll need to show us that.

This once again puts Yahoo’s fate in jeopardy as Verizon seems to be having doubts about possible damage due to the massive data breach. Silliman refused to comment on reports of Verizon looking to get a billion dollar rebate on the acquisition deal. He, however, believes that Verizon now has a solid reason to investigate and withdraw from its deal to acquire the suffering technology company.

At the round table, he also went to tell the reporters that the unacknowledged data breach could trigger a clause in the acquistion deal that would allow Verizon to tap out and not complete it. This is possibly true because every company has to give full disclosure of any and all activities it has been involved in. And specially any of those, which could possibly jeopardise the future of the company. Yahoo had failed to do so. The clause in the agreement states,

[Verizon can withdraw if an event] “reasonably can be expected to have a material adverse effect on the business, assets, properties, results of operation or financial condition of the business.

Silliman also added that the acquisition deal has already received approval from U.S. Federal Trade Commission, but it still needs acceptance from the European Commission and the U.S. SEC. But, the company isn’t likely to go ahead with the same until Yahoo can provide significant information to prove the materiality of the hack. Verizon will then evaluate the briefing and release a final statement about its itentions for the acquisition.

In response to the aformentioned remarks, a Yahoo spokesperson says,

We are confident in Yahoo’s value and we continue to work towards integration with Verizon.

If you’re unaware, Verizon recently signed an agreement to acquire most of Yahoo’s core assests for a staggering $4.8 billion. But, ever since the deal has been finalised, Yahoo has come into the limelight — not due to the said deal — but due to the unfortunate and surprising revelations regarding its operations.

First, it confirmed that over 500 million accounts have been breached during a hack in early 2015 and faced massive public outrage for the same. Just when the dust had finally started settling, Yahoo received another huge blow to the ribs. Reports of Yahoo co-operating with U.S intelligence officials and obliging to a request to run real-time surveillance on all of its e-mail accounts started surfacing the web. Thus, the situation currently looks extremely grim for the technology behemoth.

What do you think — Should Verizon drop the acquisition deal with Yahoo? Comment your thoughts down below.

A hands-on guy fascinated by new apps, technologies and enterprise products.

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