Chinese e-commerce and online auction company Alibaba has agreed to repurchase 20% stake from the search engine pioneer Yahoo for $7.1 billion. Yahoo will receive $6.3 billion in cash and about $800 million in Alibaba stock. Some of the money will be returned to shareholders.
Yahoo invested $1 billion in the Chinese company in 2005. With the investment, Yahoo controls 40% stake in the company headed by Jack Ma.
The negotiation between the two companies has been going on for almost the past one year period while Yahoo has changed its CEO for three times. The last CEO was fired last week due to academic issue.