Verizon Communications may decide to renegotiate its acquisition deal with Yahoo. Verizon said that it has a "reasonable basis" to surmise that Yahoo's recent disclosure that it was a victim of a security breach significantly diminished the brand value of the company.
Speaking to reporters at a roundtable in Washington, Verizon's General Counsel Craig Silliman said that the data breach is enough to trigger a specific clause in the deal. This clause may allow Verizon to walk away from the deal. Verizon is now waiting for Yahoo to elaborate upon the full impact of the breach.
Following Yahoo's disclosure of the breach, it is believed that Verizon is planning to renegotiate the deal for lower price than it had agreed to earlier. Some reports suggest that the discount may be as large as $1 billion. The original deal was valued at $4.83 billion. Verizon has declined to comment on whether it is renegotiating the price of the deal.
While Verizon has received preliminary reports from Yahoo, it will need "significant information" before making a final decision. The deal has already been approved by the US Federal Trade Commission. However, it is yet to be approved by the US Securities and Exchange Commission and the European Union.
Yahoo's data breach is being investigated by the Federal Bureau of Investigation and the company.
Verizon CEO Lowell C. McAdam earlier stated that the company is trying to evaluate the financial impact of the breach. Yahoo maintains that it came to know about the potential breach well after its deal with Verizon in July.