Alibaba-Yahoo Deal In the Making

Posted by Joachim Bartels | Sep 16, 2012 | Alibaba, China, E-Commerce, Online Media - Buyer - Seller Platforms, Yahoo | 0 |

The Alibaba Group will pay its key shareholder, U.S.-based Yahoo! Inc., US$7.6 billion to buy back a 20% stake in the company as a result of the agreement reached in May this year.

Yahoo is expected to receive US$7.1 billion as soon as next week, as well as a US$550 million payment related to the ending of annual licensing fees Alibaba pays Yahoo. It is estimated Yahoo will receive approximately US$4.5 billion from the deal after U.S. taxes.

The company initially invested US$1 billion in Alibaba in 2005. The sale leaves Yahoo holding approximately 20% of Alibaba shares. Under the terms of the deal, Yahoo is required to sell an additional 10% if a future Alibaba Group IPO occurs.

Source: Business Strategies Group Hong Kong

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Joachim Bartels

Joachim C Bartels is a co-founder, director, head of information resources and Editor-in-Chief of BIIA. In his capacity as Editor-in-Chief he is responsible for the selection of relevant information content concerning industry insights, trends, technological developments, standards and policies impacting BIIA members in particular and the business information industry in general.

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