US Internet firm Yahoo! and Japan’s SoftBank have announced that they have reached an agreement with their Chinese partners at Alibaba Group in a dispute over online payments platform Alipay.
Alibaba Group — which is 43 percent owned by Yahoo! — “will continue to participate in Alipay’s future financial performance, including a future IPO or other liquidity event,” the companies said in a joint statement.
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Under the terms of the agreement, Alibaba Group will receive no less than US$2-billion and no more than US$6-billion from an IPO or sale of Alipay, which is the payment platform of Alibaba Group.
Alipay will also continue to provide payment-processing services to Alibaba Group and its Taobao marketplace, China’s top online retailer, the joint statement said.
The Alibaba Group is one of Yahoo!’s most prized assets and the dispute had shaken the troubled US Internet company, which was a giant in the 1990s but now faces tough competition from Google and deep investor skepticism.
“This is a good outcome for Yahoo! and for our shareholders, as well as all the parties to this agreement,” Carol Bartz, chief executive of the Sunnyvale, California-based company, said in the statement.
The dispute became public knowledge in May when Yahoo! notified US regulators that ownership of Alipay had been shifted to a Chinese firm owned mostly by Alibaba chief executive Jack Ma.
Yahoo! said the transfer was done without the knowledge or approval of Alibaba’s board of directors or shareholders, which also include SoftBank.
Ma has insisted, however, that Yahoo! and SoftBank were informed of the transfer of ownership and it was done to comply with Chinese licensing regulations.
“Over the last few months, we have worked cooperatively with our partners at Yahoo! and SoftBank to reach an agreement that serves the interests of all parties,” Ma said in the statement announcing Friday’s agreement.
“This agreement is good for Alibaba Group and its stakeholders, including customers, employees and shareholders. Most importantly, Alipay was able to secure the license it needed to continue operating.”
The dispute had raised questions about Chinese corporate governance practices and the security of foreign investment in China.–AFP
