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Alibaba closes buyback deal with Yahoo

(Xinhua)

08:21, September 20, 2012

File photo shows an employee walking past a wall with logo of Alibaba (China) Co., Ltd in Hangzhou, capital of east China's Zhejiang Province, May 21, 2012. China's Alibaba Group closed a 7.6-billion-dollar deal with Yahoo on Sept. 18, 2012 buying back half of the shares Yahoo Inc owned in the company. (Xinhua/Huang Zongzhi)

HANGZHOU, Sept. 19 (Xinhua) -- China's Alibaba group has officially concluded a 7.6-billion-U.S. dollar buyback deal to repurchase a 20-percent stake in itself from Yahoo, according to an Alibaba statement.

Alibaba, China's largest e-commerce company, financed the transaction with a mixture of cash on hand, senior debt and the issuance of convertible preference and ordinary shares.

It paid Yahoo 6.3 billion U.S. dollars in cash and 800 million U.S. dollars in preference shares in Alibaba in the deal, restructuring its relations with the Silicon Valley company.

"The completion of this transaction begins a new chapter in our relationship with Yahoo," said Jack Ma, chairman and chief executive officer of Alibaba. "It makes our share structure healthier."

"We are grateful for Yahoo's support of our growth over the past seven years, and we are pleased to be able to deliver meaningful returns to our shareholders including Yahoo."

The initial repurchase of shares represented half of Yahoo's 40 percent stake in Alibaba on a fully diluted basis.

Analysts said the deal, after which the voting rights of Yahoo and Japan's Softbank Corp., another major Alibaba shareholder were diluted to below 50 percent in the company's board, came amid the fast growth of Alibaba's e-commerce business.

The financing package is the largest ever private financing for a private-sector Chinese company, according to the statement, issued late on Tuesday.

Eight international banks, including Barclays Bank and Australia and New Zealand Banking Group, provided 1 billion U.S. dollars of senior debt financing for the transaction. China Development Bank provided a parallel senior debt facility of 1 billion U.S. dollars.

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