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China fund may add $2b to finance Alibaba share buyback

The China Investment Corp. is in advanced talks to add as much as $2 billion into the Alibaba Group to hlep finance the Internet company’s efforts to buy back a stake from Yahoo, a person briefed on the matter said Thursday.

The Chinese Investment Corp., known as CIC, a $200 billion Chinese sovereign wealth fund, is one of several potential partners from whom Alibaba would raise money to pay for the stake repurchase. On Sunday, Alibaba announced a long-awaited deal to buy back half of Yahoo’s 40 percent stake in the company for $7.1 billion.

To finance the purchase, Alibaba is raising about $4.6 billion in total. The Chinese Internet company is holding talks with a number of other firms.


The pact with Yahoo values Alibaba at about $35 billion, although that figure could rise if the Chinese company is able to raise financing at a higher valuation.

Alibaba has undertaken a number of moves that could lead to its transformation, including an initial public offering down the road. On Thursday, Alibaba was finalizing the takeover of its publicly traded subsidiary, Alibaba.com.

But the biggest move has been securing an agreement with Yahoo over the repurchase of the stake.