Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Attacks/Breaches

10/14/2016
11:15 AM
50%
50%

Yahoo Breach May Trigger 'Material Adverse Change' Clause

The Yahoo data breach, which compromised 500 million user accounts, may cause Verizon to renegotiate its $4.8 billion acquisition deal.

Verizon Communications may have leverage to renegotiate its $4.8 billion Yahoo acquisition under a rarely used "material adverse change" clause, the Wall Street Journal reported today.

Mergers often have clauses allowing buyers to leave agreements if a development is reasonably expected to "have a material adverse effect" on the business, assets, properties, operations, or finances of an organization.

Since Verizon and Yahoo agreed to merge in July 2016, the latter disclosed a data breach that compromised 500 million user accounts. The breach reportedly occurred two years ago, but was discovered after the two companies signed an agreement.

In its Verizon deal, Yahoo confirmed no security breaches had happened or would take place by the time the transaction was complete, said Stephen S. Wu, lawyer at the Silicon Valley Law Group, to the WSJ. Now, Verizon's general counsel says it has reason to believe this breach will have a material impact.

Now, Verizon has power to possibly renegotiate its deal or abandon it, says Wu. Material adverse change clauses are rarely used by companies because courts resist them. It takes a substantial development to trigger this step.

Read more at the Wall Street Journal.  

Dark Reading's Quick Hits delivers a brief synopsis and summary of the significance of breaking news events. For more information from the original source of the news item, please follow the link provided in this article. View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Ninja
10/15/2016 | 1:45:40 PM
Re: Violated Clause
It's possible.  On the other hand, breaches happen all the time these days.

In any case, I'm not sure it will amount to a full billion-dollar savings.
RyanSepe
50%
50%
RyanSepe,
User Rank: Ninja
10/14/2016 | 2:07:30 PM
Violated Clause
That's definitely a breach of the contract conditions that they had. I would think Verizon will be able to drive down the acquisition price a great deal.
US Turning Up the Heat on North Korea's Cyber Threat Operations
Jai Vijayan, Contributing Writer,  9/16/2019
MITRE Releases 2019 List of Top 25 Software Weaknesses
Kelly Sheridan, Staff Editor, Dark Reading,  9/17/2019
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: This comment is waiting for review by our moderators.
Current Issue
7 Threats & Disruptive Forces Changing the Face of Cybersecurity
This Dark Reading Tech Digest gives an in-depth look at the biggest emerging threats and disruptive forces that are changing the face of cybersecurity today.
Flash Poll
The State of IT Operations and Cybersecurity Operations
The State of IT Operations and Cybersecurity Operations
Your enterprise's cyber risk may depend upon the relationship between the IT team and the security team. Heres some insight on what's working and what isn't in the data center.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2019-16680
PUBLISHED: 2019-09-21
An issue was discovered in GNOME file-roller before 3.29.91. It allows a single ./../ path traversal via a filename contained in a TAR archive, possibly overwriting a file during extraction.
CVE-2019-16681
PUBLISHED: 2019-09-21
The Traveloka application 3.14.0 for Android exports com.traveloka.android.activity.common.WebViewActivity, leading to file disclosure and XSS.
CVE-2019-16677
PUBLISHED: 2019-09-21
An issue was discovered in idreamsoft iCMS V7.0. admincp.php?app=members&do=del allows CSRF.
CVE-2019-16678
PUBLISHED: 2019-09-21
admin/urlrule/add.html in YzmCMS 5.3 allows CSRF with a resultant denial of service by adding a superseding route.
CVE-2019-16679
PUBLISHED: 2019-09-21
Gila CMS before 1.11.1 allows admin/fm/?f=../ directory traversal, leading to Local File Inclusion.