The transaction will be completed this summer and will take the form of a tender offer followed by a merger, after which AOL will become a wholly owned subsidiary of Verizon, the announcement said.

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"Verizon's vision is to provide customers with a premium digital experience based on a global multiscreen network platform. 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's chief executive.