Verizon Communications Inc. confirmed Monday that it plans to sell its media business to Apollo Funds in a $5 billion deal.
The telecommunications company will maintain a 10% stake in the company, which will be known as Yahoo following the deal close. The Verizon Media umbrella includes brands like Yahoo, AOL, TechCrunch, and Engadget.
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Shares of Verizon are up 0.5% in premarket trading Monday. The Wall Street Journal reported on plans for the sale last week.
“We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms,” said David Sambur, a senior partner at Apollo, in a press release.
Verizon acquired AOL for $4.4 billion in 2015 and purchased Yahoo for $4.5 billion in 2017.
“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous,” Verizon Chief Executive Hans Vestberg said in a release.
Though the Verizon Media business accounted for only 6% of Verizon’s revenue in the latest quarter, the sale of the assets will allow Verizon to focus more heavily on telecommunications and bring in money to help pay for the expensive buildout of its 5G network.
The company noted in its most recent earnings report that it recently paid about $45 billion to the Federal Communications Commission for C-band spectrum won at a recent wireless auction. The company raised $12 billion in the fourth quarter and more than $31 billion in the first quarter to finance the spectrum purchases, though building out a 5G network involves various other capital costs as well.
Verizon’s stock has slipped 1.6% year to date through Friday, while the SPDR Communication Services Select Sector exchange-traded fund XLC,
