Alibaba, the Chinese web organisation has bought back half of the stake Yahoo had in the company for $7.6 billion. They are moving to their initial public offering (IPO).
Alibaba paid $6.3 billion in cash and $800 million in shares of the Alibaba group. They also paid $550 million which is connected to an amendment regarding the two companies intellectual property license agreement.
Yahoo will give $3 billion to their shareholders after the deal goes through. This is an extra payment after the $646 million downpayment they returned to shareholders through buybacks.
Reuters say that Yahoo still hold 23 percent of Alibaba common stock, down from the 40 percent stake they acquired in 2005 for $1 billion and the sale of their China business to Alibaba.
Alibaba CEO Jack Ma said “The completion of this transaction begins a new chapter in our relationship with Yahoo.”
Kitguru says: This will strengthen Alibaba for the IPO.