Yahoo and Alibaba Finally Resolve Alipay Dispute

Alibaba could get up to $6 million if Alipay goes public

After months of dispute, Chinese company Alibaba and its part-owner Yahoo have finally reached an agreement concerning Alipay, a payments processing company.

Joined by Softbank, another major investor in Alibaba, the companies announced today that they had agreed to a deal guaranteeing Alibaba payments in the event of an Alipay IPO or other liquidity event, The New York Times reported. If Alipay decides to go public, Alibaba will receive between $2 billion and $6 billion plus certain licensing fees, assuming that Alipay’s IPO would value it at about $5.3 billion. As part of the deal, Alipay also agreed to maintain its current relationship with Taobao, one of Alibaba’s top e-commerce companies.

In a statement, Alibaba CEO Jack Ma said, “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. Most importantly, Alipay was able to secure the license it needed to continue operating.”

The dispute began last year when Alibaba tried to spin off Alipay as an independent company. Yahoo and Softbank protested the move, claiming that they hadn’t been aware of the spin-off and only found out about it in March.