Alibaba Group, China’s largest e-commerce company, has repurchased $7.6 billion in shares from Yahoo! with a combination of equity and loans financed by Chinese private equity firms and international banks, according to a company statement.
The transaction involved the largest private financing amount for a private sector Chinese company, and the largest ever non-LBO private financing for a technology company globally, according to the statement.
In addition, the huge amount of capital was raised during a time of global macroeconomic uncertainty.
Alibaba drew on several different sources of funds. $2 billion came from nine different banks, and about $3.9 billion came from different equity investors, including the sovereign wealth fund CIC International and Chinese private equity firms Boyu Capital, CITIC Capital and CBD Capital, the equity investment arm of China Development Bank.
The remainder of the fund was financed by a loan from Yahoo! and cash on hand, according to an Alibaba spokesman.
“Our ability to raise financing in these difficult market conditions speaks to the strength of our business,” Joe Tsai, chief financial officer of Alibaba Group, said in the statement.
Yahoo! has been invested in Alibaba for seven years. The repurchase represents about half of Yahoo!’s 40 percent stake.
The buyout begins a realignment of Alibaba’s relationship with Yahoo, giving the private Chinese company “a more diverse and healthy shareholder base,” an Alibaba spokesman told PE Asia.
The buyback marks the first time Alibaba has major investors from China, he added.