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Alibaba closes US$7.6b buyback deal with Yahoo
By Ding Yining |
September 19, 2012, Wednesday
|
Online Edition
Online Edition
Alibaba Group said it has completed a US$7.6 billion buyback of shares from Yahoo! Inc as part of its ongoing effort to optimize its corporate structure and support future growth.
China's largest e-commerce group said yesterday it used US$6.3 billion in cash and US$800 million of preferred shares of the group to finance the deal. The remaining US$500 million is being paid to Yahoo under a technology and patent licensing agreement.
"The completion of the share buyback will give the company a healthier share structure and also means Alibaba has entered a new stage for development," Alibaba chairman and chief executive officer Jack Ma said.
It marks Alibaba's continued effort to take control of its stake after it finished the privatization of its Hong Kong-listed B2B unit, Alibaba.com, in June.
Overseas shareholders like Softbank Corp and Yahoo will have less than 50 percent of voting rights, giving the Alibaba management team more control over the company's strategies.
"The success of the buyback will enable Alibaba to speed up strategic shifts," said Feng Po, analyst with research firm ChinaVenture Group.
Jack Ma said at the company's annual customer convention in Hangzhou last week that Alibaba will introduce more online tools and services to small enterprise owners next year to help them improve consumer services.
The deal has reduced Yahoo's stake in Alibaba Group from 40 percent to around 23 percent.
A consortium of eight banks including China Development Bank, Credit Suisse, DBS Bank, Barclays Bank and Morgan Stanley provided financing for the buyback.
Alibaba Group is now valued at US$40 billion, more than that of NASDAQ-listed Baidu and Sina.
China's largest e-commerce group said yesterday it used US$6.3 billion in cash and US$800 million of preferred shares of the group to finance the deal. The remaining US$500 million is being paid to Yahoo under a technology and patent licensing agreement.
"The completion of the share buyback will give the company a healthier share structure and also means Alibaba has entered a new stage for development," Alibaba chairman and chief executive officer Jack Ma said.
It marks Alibaba's continued effort to take control of its stake after it finished the privatization of its Hong Kong-listed B2B unit, Alibaba.com, in June.
Overseas shareholders like Softbank Corp and Yahoo will have less than 50 percent of voting rights, giving the Alibaba management team more control over the company's strategies.
"The success of the buyback will enable Alibaba to speed up strategic shifts," said Feng Po, analyst with research firm ChinaVenture Group.
Jack Ma said at the company's annual customer convention in Hangzhou last week that Alibaba will introduce more online tools and services to small enterprise owners next year to help them improve consumer services.
The deal has reduced Yahoo's stake in Alibaba Group from 40 percent to around 23 percent.
A consortium of eight banks including China Development Bank, Credit Suisse, DBS Bank, Barclays Bank and Morgan Stanley provided financing for the buyback.
Alibaba Group is now valued at US$40 billion, more than that of NASDAQ-listed Baidu and Sina.
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