Yahoo trying to shed Alibaba stake, but not paying taxes

9th November, 2011 by adina
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It is believed that Yahoo tries to find a way to shed its stake in Alibaba Group avoiding to pay taxes related to the sale, says a Wall Street Journal report. Not paying these taxes would bring about $5 billion savings, as Yahoo has a forty percent stake in the Chinese company, which means about $14 billion.

A “cash-rich split-off” strategy may be one of multiple potential actions in what is considered to be a “global chess game” related ownership of Yahoo as well as its investments. About a dozen companies are believed to look for favorable positions.

Expected candidates certainly are supposed to be eyeing Yahoo’s popular network of sites and advertising business. However, the major investments in Yahoo Japan and Alibaba have provided further levels of complexity. In order to avoid paying taxes on share sales, it would be necessary for Alibaba to create a new subsidiary. Its stock would have to be swapped instead of being sold outright.

Negotiations are ongoing, but it is still unclear if Yahoo has to be sold entirely or divest a part or all of its assets.


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