US telecoms company Verizon Communications Inc. has announced that it has entered into an agreement to acquire Yahoo! Inc.’s operating business for approximately $4.83m, with chief executive officer Marissa Mayer set to receive a $55m severance package.

Yahoo, once valued at $125bn, will be integrated with AOL under Verizon executive vice president and president of product innovation and new business organisation according to a blog post.

The addition of Yahoo to Verizon and AOL is set to create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities, with more than 25 brands in the portfolio in the fields of finance, news and sports.

Additional tech assets include programmatic DSP Brightoll, independent mobile apps analytics service Flurry and native and search advertising solution Gemini.

“Just over a year ago, we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,” said Verizon chairman and chief executive officer Lowell McAdam.

“The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”

Mayer commented that the sale, which does not include Yahoo’s cash, its shares in Alibaba Group Holdings or in Yahoo Japan, is an important step in unlocking shareholder value.

“Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL,” she added. “This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social.

“Yahoo and AOL popularized the Internet, email, search and real-time media. It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile.”

The deal is expected to close in Q1 of 2017, subject to customary closing conditions.