Alibaba and Yahoo have had a very tenuous relationship, with the former trying to buy back its stake from the latter since years. Last month, it was revealed that Alibaba was trying to raise close to $8 billion in order to buy around 20% of its stake from Yahoo.
In a press release today, Alibaba announced that it had completed the repurchase of its shares from Yahoo In a transaction worth approximately $7.6 billion.
The transaction includes around half of Yahoo’s 40% stake in Alibaba, valued at $7.1 billion, and a one time cash payment of $550 million related to their existing technology and intellectual property licensing agreements.
Jack Ma, Chairman and Chief Executive Officer of Alibaba Group, said:
“The completion of this transaction begins a new chapter in our relationship with Yahoo! We are grateful for Yahoo!’s support of our growth over the past seven years, and we are pleased to be able to deliver meaningful returns to our shareholders including Yahoo!. I look forward to working with Marissa Mayer and her team in our continued partnership.”
It was initially expected that Yahoo would return most of the cash to shareholders, but under Marissa Mayer’s reign, that cash might be put to better use and fuel the growth of the aging giant through acquisitions.