It is done. The long, complicated relationship between Yahoo and Alibaba entered a new stage today with Alibaba announcing the companies had closed their share repurchasing deal.
According to an Alibaba press release, the deal breaks down like this:
“The initial repurchase of shares, which represented one-half of Yahoo!’s 40% stake in Alibaba Group on a fully diluted basis, was valued at approximately US$7.1 billion. Of this, Yahoo! received approximately US$6.3 billion in cash and US$800 million in preference shares in Alibaba Group. Concurrent with the initial repurchase, Alibaba Group paid Yahoo! a one-time cash payment of US$550 million in connection with the amendment of their existing technology and intellectual property license agreement.”
Yahoo still retains a stake in Alibaba. Though Alibaba may repurchase half of that stake “upon a qualifying initial public offering in the future.”
It’s been a tortured history at times, between the two companies. But worth noting, it’s still a nice return on Yahoo’s original investment of $1 billion.
Now, the question remains: Will Yahoo return that windfall to investors? Or will it hold on to it for a buying spree, as new CEO Marissa Mayer hinted?