Alibaba, the Chinese e-commerce giant, has hired a Washington lobbying firm for the first time, in an apparent signal of its intent to buy all of Yahoo! if attempts to untangle the companies’ Asian partnership fail.
The company, which is 40pc owned by Yahoo!, enlisted the Duberstein Group last autumn, according to congressional filings. The lobbying firm is headed by Kenneth Duberstein, the former chief of staff during the Reagan administration, and also acts for BP America, Goldman Sachs and pharmeceuticals giant, Pfizer.
Japan’s Softbank, which owns a 30pc stake in Alibaba and is a partner in Yahoo! Japan, is listed as an affiliate of Alibaba in the disclosures, which were lodged at the White House just before Christmas.
Alibaba’s chief executive and chairman, Jack Ma, said last September that he was keen to acquire Yahoo! if it were possible, and that he had held preliminary talks with private equirty companies.
The plan was for Alibaba to take Yahoo!’s Asian assets and offload the US business, but the proposal was put on the backburner late last year as Yahoo!, Alibaba and Softbank tried to unwind their complex web of relationships instead, reviving a string of attempts by Alibaba to buy back part of Yahoo!’s stake in the company.
According to reports, Yahoo! is weighing a plan valued at roughly $17bn (£11bn) that would reduce its shareholding in Alibaba and see Yahoo! exit Yahoo! Japan altogether – seen by investors as one of its prize assets. A handful of lenders were considering committing to a $4bn loan for Alibaba earlier this month.
Either deal would draw a neat line under a bitter rift between Alibaba and Yahoo!, which was one of the key reasons that Carol Bartz, Yahoo!’s former chief executive, was fired last September.
However, any takeover of Yahoo!’s US assets by Alibaba is likely to meet opposition from American politicans wary of an internet company falling under Chinese control, making a lobbying firm key.
Chinese companies, such as telecoms giant Huawei, have run into considerable opposition when they have tried to buy US assets over the years, amid concerns over censorship and the potential for spying.
“The national security concern is sometimes just an excuse for commercial concerns for any country, but certainly for the US,” Mark Natkin, managing director of Beijing-based consultancy Marbridge Consulting, said.
Before Ms Bartz was fired, Yahoo! repeatedly thwarted attempts by Mr Ma to buy back some of Yahoo!’s stake in Alibaba, causing considerable tensions between the two companies. However, the final straw was the circumstances surrounding the transfer of Alibaba’s payment business, Alipay, to a closely held company controlled by Mr Ma at the start of the year.
Ms Bartz and Yahoo!’s board did not appear to realise how much the deal would impact the value of Yahoo!’s $1bn (£610m) investment in Alibaba until after the transaction was complete, sparking a string of lawsuits by shareholders.