American telecoms giant Verizon has agreed to buy AOL in a deal worth $4.4 billion (£2.8bn), the two companies have confirmed.
The proposed takeover will see AOL acquired at $50 (£32) per share, a 23 per cent premium over the company’s recent valuation.
AOL stock ended trading yesterday, May 11, at $42.59 (£27.16) per share (via BBC).
It is believed that Verizon’s primary interest in AOL centres around the technologies the former internet giant has developed for selling and delivering video ads online.
Verizon recently announced plans to launch a mobile-focussed video service this summer as it faces increased competition in the US network space.
Despite Verizon’s main focus of the takeover being centred around video tech, the deal also includes AOL’s dial-up subscription business and websites including Engadget, Huffington Post and Techcrunch.
"Verizon’s acquisition further drives its LTE wireless video and OTT (over-the-top video) strategy," an official company spokesperson announced.
They added: "The agreement will also support and connect to Verizon’s IoT (Internet of Things) platforms, creating a growth platform from wireless to IoT for consumers and businesses."
Related: Samsung Galaxy S6 review
Speaking on the takeover, Verizon's Chairman and CEO, Lowell McAdam, stated: “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.”
He added, “AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world. At Verizon, we’ve been strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising.
Despite the takeover, AOL Chairman and CEO, Tim Armstrong will retain control of AOL's operations after closing.
Breaking News: More to follow…