US internet company Yahoo said it has reached a deal to sell part of its stake in China’s biggest internet company Alibaba Group.<\/p>\n
Alibaba will buy back half the 40% stake owned by Yahoo, following years of negotiations.<\/p>\n
The deal will raise about $7.1bn (\u00a34.5bn) for Yahoo, which has been losing ground to rival Google and Facebook in online advertising.<\/p>\n
The agreement also allows Alibaba to consider an initial public offering.<\/p>\n
Shareholders<\/strong><\/p>\n Both companies revealed in a statement that Alibaba will pay Yahoo $6.3bn in cash and up to $800m in Alibaba preferred stock.<\/p>\n For Yahoo, the deal gives it the ability to pay dividends, make acquisitions, or buy back its own shares, something its stockholders have been asking for.<\/p>\n “We look forward to delivering the proceeds of the near-term transaction to our shareholders,” said Timothy R Morse, chief financial officer at Yahoo.<\/p>\n Some analysts have said that most of Yahoo’s value is based on its Asian assets, and selling them will allow its core US operations to be valued by investors.<\/p>\n ‘New chapter’<\/strong><\/p>\n The agreement also allows the Chinese group to buy more of Yahoo’s remaining 20% stake, if Alibaba pushes ahead with a sale of its own shares on the stockmarkets, a move that many observers expect.<\/p>\n The deal is welcome news for Alibaba which has long been looking to buy back the part of its company owned by Yahoo. However, negotiations have suffered many setbacks.<\/p>\n “This transaction opens a new chapter in our relationship with Yahoo,” said Jack Ma, chief executive officer of Alibaba Group, which runs the popular Chinese online market place Taobao.<\/p>\n He also said both companies would continue to work together, with Yahoo’s global audience being an attractive opportunity for Alibaba, as it seeks growth outside China. <\/p><\/p>\n","protected":false},"excerpt":{"rendered":" US internet company Yahoo said it has reached a deal to sell part of its stake in China’s biggest internet company Alibaba Group. <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-112320","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n