Yahoo is to buy 10 per cent of the shares to be sold by Alibaba.com in an initial public offering that is expected to raise roughly $1 billion (€700 million).
Alibaba, China's largest e-commerce company, plans to sell 858.9 million shares, or 17 per cent of its enlarged share capital, in a Hong Kong listing.
Of the shares to be sold, 75 per cent are earmarked for global investors, 15 per cent for Hong Kong retail investors and 10 per cent for Yahoo.
In 2005, Alibaba absorbed Yahoo's China business, and Yahoo bought a 40 per cent stake in Alibaba for $1 billion.
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The China consumer business will not be included in the IPO, sources said.