Yahoo (NASDAQ:YHOO) announced that it has completed the sale of half of its stake in Alibaba and plans to return most of the cash proceeds of the sale to shareholders.
Under the terms the previously announced deal, Alibaba, a Chinese ecommerce website, paid $7.6 billion to buy back the Yahoo’s stake in the company, the New York Times noted.
Yahoo officials said the company would return $3 billion, roughly 85% of the cash proceeds from the Alibaba deal, to shareholders, but did not say how the company planned to do that.
Since May, Yahoo has repurchased shares totaling $646 million.
The two companies have had a relationship since 2005, when Yahoo purchased a 40% stake in the company. As Yahoo’s fortunes have declined, the relationship between the companies deteriorated.
The deal to sell half of Yahoo’s stake in Alibaba was announced back in May. Analysts noted that while the deal provides Yahoo with a needed cash infusion, it does little to put the struggling Internet pioneer back on a path to web prominence.
Yahoo’s remaining stake in Alibaba is currently valued at $8.1 billion. Yahoo will sell more of its stake when the company goes public as part of the deal.
Shares of Yahoo were mostly flat in Wednesday afternoon trading.