Yahoo, Inc. has finally made the decision of selling its stake in Alibaba Group. The roots of the decision could be found to end up at the new Interim Yahoo CEO Ross Levinsohn. It was a long awaited choice that many experts had been suggesting for the beleaguering company.

Now that it has been made clear that the deal will be finalized in the latter part of the year, some of the details have been made public. Yahoo will sell a quarter and a half of its shares now, with the rest at the time when Alibaba goes public. The share price then will be decided on the valuation of the Chinese company. Alibaba’s current value is estimated in the neighbourhood of $35 Billion.

The Santa Clara-based internet giants will also receive $550 Million from Alibaba in the form of royalties to operate Yahoo China for the next four years.

Following is the excerpt from the deal penned down by both companies.

– Under the first step of the transaction, expected to be completed later this year, Alibaba will buy back “up to half” of Yahoo’s current stake “generating more than $7 billion in proceeds if they buy the full amount.”

– The companies said the purchase price will be based on a valuation of Alibaba to be established through equity financings Alibaba plans to make to finance the transaction, subject to a floor valuation for the entire company of $35 billion.

– The two companies said that Alibaba will be required to close the repurchase of at least a quarter of Yahoo’s current stake no matter how much is raised in the contemplated equity financing, and up to one half if it obtain the required financing.

– The companies note that the deal “includes substantial financial incentives for Alibaba to raise the additional equity at a valuation higher than $35 billion.”