Chinese Web giant Alibaba has bought back half of the stake Yahoo owns in the company for US$7.6 billion, as it moves closer to its initial public offering (IPO).
Reuters reported Tuesday Alibaba paid Yahoo US$6.3 billion in cash and US$800 million in preferred shares of Alibaba Group. It also made a one-time cash payment of US$550 million connected to an amendment regarding the two companies' intellectual property (IP) license agreement.
The agreement for the deal was announced by the two companies last May.
From the US$4.3 billion after-tax proceeds from the sale, Yahoo will give US$3 billion to its shareholders. This is in addition to the US$646 million downpayment Yahoo already returned to shareholders through buybacks, the report added.
Yahoo still holds 23 percent of Alibaba's common stock, down from its 40 percent stake it acquired in 2005 for US$1 billion and the sale of its China business to Alibaba, the report said.
Alibaba CEO Jack Ma said: "The completion of this transaction begins a new chapter in our relationship with Yahoo."