Telecom giant Verizon (VZ) said Tuesday it will acquire digital conglomerate AOL (AOL) in a deal valued at approximately $ 4.4 billion.
Verizon says the deal is aimed at boosting its strength in mobile platforms and advertising.
The announcement sent pre-market shares in AOL soaring nearly 18% while Verizon’s pre-market stock fell about 1.6%.
AOL owns a number of digital properties including The Huffington Post, TechCrunch and Engadget.
The deal, which works out at $ 50 per share, values AOL at 15% more than the price the stock closed at on Monday — $ 42.59.
“This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience,” said Lowell McAdam, Verizon chairman and CEO, in a statement.
Tim Armstrong, AOL’s chairman and CEO, will stay on to run AOL after the acquisition.
“The visions of Verizon and AOL are shared; the companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video,” Armstrong said.
AOL played a leading role in the rise of digital services, most notably through its dial-up Internet access. A subsequent massive merger with Time Warner in 2000 — valued at $ 183 billion — ended badly, and AOL was sold off as a separate company.
The deal unveiled Tuesday is expected to be finalized this summer. It will need to be approved by regulators.
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