NEW YORK (CNNMoney) — Verizon is buying AOL for $4.4 billion, or about $50 a share, the companies announced Tuesday.
The deal is part of Verizon’s new focus on digital and video platforms, as well as its connected device network, which it calls “Internet of Things,” the telecommunications company said.
“This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience,” said Verizon CEO Lowell McAdam.
AOL, a pioneering Internet brand, now has several media businesses, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com.
Under the terms of the transaction, AOL will become a subsidy of Verizon. CEO Tim Armstrong will remain in his post after the deal is done.
Armstrong said on CNBC on Tuesday that AOL’s turnaround plan has been a success and that the company is “as big as it can possibly be in today’s landscape.”
He said working with Verizon will propel the company into “a space where there are going to be massive, global-scale networks.”
The merger, which is subject to regulatory approval, is expected to close sometime this summer.
Shares of AOL jumped 17% to roughly $50 ahead of the opening bell. The stock closed at $42.59 on Monday. Verizon shares were down slightly.