Yahoo, Alibaba reach $7.1 billion deal
May 21, 2012 -- Updated 0846 GMT (1646 HKT)
- Yahoo and China's Alibaba Group have agreed to a $7.1 billion share buyback deal
- The China internet behemoth will buy back half of Yahoo's 40% stake in the company
- Comes after the departure of Yahoo CEO Scott Thompson in a resume padding scandal
- The relationship between Alibaba and Yahoo has often been fractious
Hong Kong (CNN) -- Yahoo and China's Alibaba Group have agreed to a $7.1 billion deal in which the Hangzhou-based internet behemoth buys back half of Yahoo's 40% stake in the company.
The agreement will give a much-welcomed cash injection to Yahoo, which has lost 65% of its value since its 2006 peak and is smarting from the resume-padding scandal of ex-CEO Scott Thompson, the third chief executive to lead the beleaguered web portal in three years.
Yahoo's 40% stake in Alibaba, purchased in 2005 for $1 billion, is widely considered the company's greatest asset. But the relationship has been a fractious one, punctuated with public disagreements over company direction, as well as Yahoo siding with Google in its 2010 fight with Chinese regulators.
Alibaba CEO Jack Ma publicly said in September he might be interested in buying Yahoo. "This transaction opens a new chapter in our relationship with Yahoo," Ma said in a news release Monday.
Why can't Yahoo keep a CEO?
MYB: Yahoo CEO resigns
Alibaba is a leading e-commerce provider in China, the world's largest internet market.
"Today's agreement provides clarity for our shareholders on a substantial component of Yahoo!'s value and reaffirms the significance of our relationship with Alibaba," said Ross Levinsohn, interim CEO of Yahoo, in a release on the deal.
Under the terms of the deal, Yahoo will get $6.3 billion in cash and up to $800 million in newly issued Alibaba preferred stock.
"We look forward to delivering the proceeds of the near-term transaction to our shareholders, and to the further enhancement of value and the additional monetization in the future that this agreement enables," said Timothy R. Morse, chief financial officer of Yahoo.
Today's five most popular stories
Part of complete coverage on
February 6, 2013 -- Updated 1526 GMT (2326 HKT)
Advocates say the exam includes unnecessarily invasive and irrelevant procedures -- like a so-called "two finger" test.
February 6, 2013 -- Updated 0009 GMT (0809 HKT)
Supplies of food, clothing and fuel are running short in Damascus and people are going hungry as the civil war drags on.
February 6, 2013 -- Updated 1801 GMT (0201 HKT)
Supporters of Richard III want a reconstruction of his head to bring a human aspect to a leader portrayed as a murderous villain.
February 5, 2013 -- Updated 1548 GMT (2348 HKT)
Robert Fowler spent 130 days held hostage by the same al Qaeda group that was behind the Algeria massacre. He shares his experience.
February 6, 2013 -- Updated 0507 GMT (1307 HKT)
As "We are the World" plays, a video shows what looks like a nuclear attack on the U.S. Jim Clancy reports on a bizarre video from North Korea.
The relationship is, once again, cold enough to make Obama's much-trumpeted "reset" in Russian-U.S. relations seem thoroughly off the rails.
Ten years on, what do you think the Iraq war has changed in you, and in your country? Send us your thoughts and experiences.
February 5, 2013 -- Updated 1215 GMT (2015 HKT)
Musician Daniela Mercury has sold more than 12 million albums worldwide over a career span of nearly 30 years.
Photojournalist Alison Wright travelled the world to capture its many faces in her latest book, "Face to Face: Portraits of the Human Spirit."
February 6, 2013 -- Updated 0006 GMT (0806 HKT)
Europol claims 380 soccer matches, including top level ones, were fixed - as the scandal widens, CNN's Dan Rivers looks at how it's done.
February 6, 2013 -- Updated 1237 GMT (2037 HKT)
That galaxy far, far away is apparently bigger than first thought. The "Star Wars" franchise will get two spinoff movies, Disney announced.
July 25, 2014 -- Updated 2327 GMT (0727 HKT)
It's an essential part of any trip, an activity we all take part in. Yet almost none of us are any good at it. Souvenir buying is too often an obligatory slog.