Who wins on Yahoo Alibaba $7.1 billion deal?
China’s largest e-commerce provider, Alibaba has agreed to buy back up to half of a 40 percent stake in his Alibaba Group Holding Ltd. from, a troubled Internet media company Yahoo Inc (NASDAQ: YHOO) for $7.1 billion. Yahoo! will sell half of a 40 percent it’s stake in Alibaba for at least $6.3 billion in cash and up to $800 million in new Alibaba preferred stock.
Yahoo will divest an additional 10 percent of the Chinese Internet company, when largest e-commerce provider, Alibaba files for an initial public offering.
“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,” Ross Levinsohn, Yahoo’s interim chief executive, said in a statement.
“This transaction opens a new chapter in our relationship with Yahoo,” said Jack Ma, chairman and chief executive officer of Alibaba Group. “The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future.”
Yahoo acquired approximately 40% stake in Alibaba in 2005 with 1 billion dollars and Yahoo’s Chinese operations.
- Alibaba Chief Executive Officer Jack Ma owns about 7.4 percent of Alibaba Group worth $2.6 billion.
- Jack Ma is planning an Alibaba IPO following the success of last week’s offering by Facebook Inc. (FB).
- China’s online shopping industry has a projected 42 percent growth this year.
- Alibaba’s revenue rose to $2.3 billion in the year from $1.3 billion a year earlier.
Question: Who wins on Yahoo Alibaba $7.1 billion deal?
Answer: Alibaba and Chief Executive Officer Jack Ma are clear winner here!!!
What you think?