Japan's SoftBank to Sell $8 Billion of Alibaba Stake

Softbank Studio Grab - H 2014
AP Images

Softbank Studio Grab - H 2014

The internet, investing and telecom giant is to sell $8 billion of its stake in China's Alibaba Group.

Japanese internet, investing and telecom giant SoftBank Group (SBG) is to sell $8 billion of its stake in China's Alibaba Group.

The $8 billion stake represents 4.2 percent of Alibaba, valuing it at around $190 billion. SoftBank will remain the Chinese company's biggest shareholder, with a 28 percent stake worth around $53 billion.

SoftBank's founder and CEO Masayoshi Son invested $20 million in Jack Ma's Alibaba in 2000, generating a massive return for his company as the Chinese group grew exponentially in the years since.

"When I first met Jack Ma, I knew immediately he had the vision and passion to build the world’s leading e-commerce company," said Son. "This investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects. In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership."

SoftBank attempted to buy DreamWorks Animation in 2014, following that unsuccessful bid with a $250 million investment in Legendary Pictures. In March, SoftBank invested another $250 million, this time in talent agency and sports and fashion group WME-IMG.

Alibaba, meanwhile, has become even more active in entertainment, with its Alibaba Pictures subsidiary investing in Mission: Impossible — Rogue Nation, Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond as well as moving into production, including a remake of Night at the Museum.

SoftBank will sell parts of its stake to Alibaba, an unnamed sovereign wealth fund and U.S. institutional investors. SoftBank will use the proceeds to pay down some of its high levels of debt.