Leeky
Posts: 3,357 +116
<p>
After years of negotiations, US internet company Yahoo <a href="https://investor.yahoo.net/releasedetail.cfm?ReleaseID=675079">announced</a> it has reached a deal to sell part of its stake in China's biggest internet company, Alibaba Group Holdings Ltd. The deal will see Alibaba buy back half of the 40% stake Yahoo holds in the group for $7.1 billion.</p>
<p>
Alibaba will finance the deal with $6.3 billion in cash, as well as around $800 million in Alibaba preferred stock. As part of the deal, Alibaba will also be required to buy back a quarter of the remaining shares at the price of a future IPO, or allow Yahoo to sell them in the expected public offering at a future date.</p>
<p>
The deal values Alibaba Group at around $35 billion. "The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future," Alibaba CEO Jack Ma said in a statement to <a href="https://www.businessweek.com/news/2012-05-20/alibaba-buys-back-20-percent-stake-in-itself-from-yahoo-for-7-billion">Bloomberg</a>.</p>
<p>
It's rumored that Alibaba's CEO, who owns a 7.4-percent share in the group, is readying an initial public offering. Demand is certainly increasing with industry insiders predicting the Chinese online shopping industry will grow by 42-percent this year alone.</p>
<p>
The deal also includes the agreement for the Chinese group to use Yahoo's branding for a further four years, for which Yahoo will be compensated with an upfront royalty payment of $500 million, along with further undisclosed payments. More importantly, the deal means Yahoo is now free to invest in the Chinese market.</p>
<p>
"Yahoo! intends to return substantially all of the after-tax cash proceeds to shareholders following the closing of the transaction" the company said in a statement. "While the form of the return of capital to shareholders has not yet been finalized, Yahoo!’s board has increased Yahoo!’s share buyback authorization by US $5 billion concurrently with this transaction."</p>
<p>
Those familiar with the situation estimate that Yahoo will net around $4 billion from the deal, once taxes have been paid.</p><p><a rel='canonical' href='https://www.techspot.com/news/48663-yahoo-to-sell-back-half-the-shares-it-owns-in-alibaba-netting-71bn.html' target='_blank'>Permalink to story.</a></p><p class='permalink'><a rel='canonical' href='https://www.techspot.com/news/48663-yahoo-to-sell-back-half-the-shares-it-owns-in-alibaba-netting-71bn.html'>https://www.techspot.com/news/48663-yahoo-to-sell-back-half-the-shares-it-owns-in-alibaba-netting-71bn.html</a></p>
