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Yahoo near deal to divest of Alibaba?

The companies are in talks for the Web pioneer to sell a large chunk of its holdings in the China e-commerce giant, sources tell All Things D.

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Steven Musil Night Editor / News
Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
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Yahoo and Alibaba are in negotiations to sell a large chunk of the China e-commerce giant back to the company, according to an All Things D report this evening.

The complex deal, which would include a share buyback and an eventual IPO by the Chinese company, has yet to be officially approved by the companies' boards but may be announced as early as Monday, multiple sources told the site. Under the terms of the deal, Yahoo would sell half its 40 percent stake for about $7 billion. The proceeds could then be used to buy back shares, All Things D reported.

The deal would finally put an end to one of more difficult corporate relationships in the Internet community. Yahoo, which has been in a state of uncertainty for months, was said to be considering a deal to sell its Asian assets back to their majority holders in a tax-free deal worth $17 billion. However, an ownership swap involving Alibaba and Yahoo Japan fell apart earlier this year.

CNET has contacted Yahoo for comment, and we will update this report when we learn more.