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China's Alibaba completes repurchase of Yahoo stake

  • China's Alibaba Group has repurchased half the stake Yahoo owned in the company for $7.6 billion as it edges closer to an initial public offering (IPO).

    Alibaba paid Yahoo about $6.3 billion in cash and $800 million in preferred shares in Alibaba Group.

    It also made a one-off cash payment of $550 million in connection with changes to an intellectual property license agreement.

    Yahoo acquired a 40 percent stake in Hangzhou- based Alibaba in 2005 in exchange for $1 billion and ownership of Yahoo’s Chinese operations.

    Yahoo still owns around 23 percent of Alibaba's common stock, valued at $8.1 billion.

    Coupled with preferred stock, its stake is valued at about $8.9 billion.

    Alibaba said it has the right to buy back half of Yahoo's remaining stake at the time of its planned IPO.