Yahoo is pulling the trigger on its planned spin-off of Alibaba stock
REUTERS/Kevin Lamarque
The new company, called Aabaco Holdings, will own approximately 384 million shares of Alibaba Group, and Yahoo will give all its shareholders a stake of the investment company.
At Alibaba's current market price, Aabaco's stake is worth about $3.2 billion.
Aabaco will also own a newly formed entity called Yahoo Small Business.
Yahoo's initial rationale for the spinoff, which will occur in the fourth quarter of 2015, was to maximize its return of capital to shareholders and minimize taxes on the sale.
In May, Yahoo stock tanked when Bloomberg reported that the IRS was changing its policy on tax-free spinoffs. However, Yahoo said that the changes wouldn't affect its plan, because it had already filed a request.
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