China's Alibaba Group said it bought back half the stake Yahoo! Inc owned in the company for about $7.6 billion, moving closer to an initial public offering. 

As ALB noted in May, 15 law firms are reported to have been involved in the deal.

Skadden, Arps, Slate, Meagher & Flom acted as Yahoo!’s lead legal counsel; Weil, Gotshal & Manges was legal counsel to Yahoo!; Conyers Dill & Pearman served as Cayman Islands counsel to Yahoo!; Munger, Tolles, & Olson acted as legal counsel to the Yahoo Board of Directors. 

On the other side of the table, Wachtell, Lipton, Rosen & Katz acted as lead legal counsel to Alibaba; Freshfields Bruckhaus Deringer advised on financing and Hong Kong legal matters; Fangda Partners served as PRC counsel; Fenwick & West assisted on intellectual property matters; and Maples and Calder served as Cayman Islands legal counsel. 

A Sullivan & Cromwell team led by Hong Kong partner Chun Wei advised lead investors CIC International, CITIC Capital, and Boyu Capital. A Paul, Weiss, Rifkind, Wharton & Garrison team represented Silver Lake and Temasek, existing shareholders that increased their investment. Japanese telecommunications company Softbank was counselled by a Morrison & Foerster Tokyo team led by Ken Siegel and Ivan Smallwood.

With regards to Alibaba's $1 billion financing, the eight underwriters were advised by a Hong Kong White & Case team led by John Hartley, King & Wood Mallesons on PRC law and Walkers as to offshore law aspects.

Alibaba said it paid Yahoo! about $6.3 billion in cash and $800 million in preferred shares in Alibaba Group. It also made a one-time cash payment of $550 million in connection with an amendment to the two companies' intellectual property licence agreement.

Separately, Yahoo! said it will return to shareholders $3 billion of the $4.3 billion of after-tax proceeds from the sale. This is in addition to the $646 million downpayment that it has already returned to its shareholders through buybacks.

Yahoo! continues to own about 23 percent of Alibaba's common stock, valued at $8.1 billion, the U.S. internet company said. Together with preferred stock, its stake is valued at about $8.9 billion, Yahoo said.

Yahoo! owned about 40 percent of Alibaba Group before Tuesday's transaction.

Alibaba said it has the right to buy back half of Yahoo!'s remaining stake at the time of the Chinese company's planned initial public offering.

Once Alibaba repurchases Yahoo!'s shares, the parties will re-state their shareholders agerements, leaving Softbank as Alibaba's largest shareholder.

Alibaba, which reached an agreement with Yahoo! in May to buy back its shares, took its business-to-business e-commerce platform Alibaba.com private for $3 billion in June.

"The completion of this transaction begins a new chapter in our relationship with Yahoo!," Alibaba CEO Jack Ma said.

Yahoo! originally acquired its stake in Alibaba Group in 2005 in exchange for $1 billion, and the sale of its Yahoo! China business to Alibaba Group.

Alibaba received $1 billion in funding from eight international banks including Barclays Bank, Citi, Credit Suisse, Deutsche Bank and Morgan Stanley, and another $1 billion from the China Development Bank.

It raised the remaining funds through an issue of convertible preferred shares and ordinary shares to investors such as CIC International Co Ltd, Boyu Capital, Temasek Holdings Pvt Ltd, and DST Global.

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