Alibaba buys back shares from Yahoo for $7.1BN

Yahoo has started to cash out of its 40 percent stake in Chinese Internet giant Alibaba.

Under a deal announced in May, Alibaba has bought back about half of Yahoo’s stake in the company for $7.1 billion in cash and preferred shares, marking the first step towards regaining full control over its future, the New York Times reported today.

Forbes said Alibaba has the right to buy back half of Yahoo’s remaining stake if and when it launches an initial public offering in the next few years.

“The completion of this transaction begins a new chapter in our relationship with Yahoo,” Jack Ma, Alibaba’s chairman and chief executive, said in a statement.

“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.”

Yahoo bought the stake in Alibaba in 2005 for $1 billion. Alibaba has long wanted to take it back in order to regain full control over its destiny.

The Wall Street Journal reported that Yahoo said in May that it would return the proceeds of the sale to shareholders, but since hiring Marissa Mayer as CEO those plans have been put on review.

More from GlobalPost: Google's Marissa Mayer named Yahoo CEO