Alibaba Signs Buyback Agreement With Yahoo

As everyone expected, Yahoo! finally reached an agreement with Alibaba to sell back half of its stake in the Chinese e-commerce site.

It means Alibaba will buy back almost 20 percent of its fully diluted shares from Yahoo for about $7.1 billion. The transaction makes Alibaba worth approximately $35 billion.

Under the deal, Yahoo has the right to make other investments in China from now on, while Alibaba will hold a transitional license to continue and operate Yahoo China under the Yahoo brand for up to four years.

Yahoo will continue to hold a seat on Alibaba’s board and have the right to appoint one of four existing directors.

Yahoo’s interim chief executive Ross Levinsohn said:

Today’s agreement provides clarity for our shareholders on a substantial component of Yahoo’s value and reaffirms the significant of our relationship with Alibaba.

We look forward to continued collaboration with the Alibaba team on business initiatives as we explore joint opportunities for growth and benefit from Alibaba’s future.

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