Verizon Communications Inc. (NYSE:VZ) might back out from a $4.83 billion deal to acquire Yahoo! Inc. (NASDAQ:YHOO)’s core internet business. Verizon recently said that Yahoo’s huge data breach of email accounts signifies a material impact, which could enable Verizon to withdraw from the agreement.
Speaking to reporters in Washington, the company’s general counsel Craig Silliman said the breach could trigger a clause in the agreement that would enable Verizon to walk away from the deal. Silliman 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.”
Verizon hasn’t revealed if it is currently in discussions with Yahoo over getting a better price.
Yahoo shares fell 1.75 percent to $41.62 on Thursday following the news.
The agreement has a clause that says the U.S wireless company can withdraw in case a new event has a material adverse impact on the business, assets, properties, results of operation or financial condition of the business.
Yahoo last month revealed that a data breach in 2014 affected more than 500 million accounts and compromised information including users’ names, encrypted passwords, telephone numbers, email addresses and dates of birth. The Sunnyvale, California-based company said a “state-sponsored” actor was behind the cyber-attack.