Alibaba - Yahoo

Alibaba has hired the lobbying firm of former White House official Kenneth Duberstein in a major step towards the company preparing to buy Yahoo, according to multiple reports. Alibaba CEO Jack Ma is already on the record saying he’d like to buy the entirety of the Silicon Valley Internet company if the opportunity arose, and has reportedly been working on a deal with a group of investors for some time now. Yahoo currently owns 40 percent of Alibaba.

Hiring the Washington, DC-based Duberstein Group is a tip-off to Ma’s plans because of the political hurdles likely ahead for any potential deal. Alibaba is a Chinese-owned company, and the U.S. government has previously cited “national security concerns” as rationale for blocking other acquisitions. Presumably the influence of a powerful DC lobbying firm could help push the deal through despite tenuous Sino-U.S. relations.

While nothing approaching an official offer has been made, Bloomberg reported yesterday that a group including Alibaba was prepping a bid at $16.60 per share. Yahoo’s stock jumped 5 percent on the news in after-hours trading, though it’s down around 20 percent for the year. The company is currently valued at around $16.6 Billion, and multiple reports put a sale price in the $20-25 billion range should an Alibaba-centered deal materialize.

So here’s my question for you: Alibaba and Yahoo or not, should the U.S. government have a say in the sale of a U.S.-based Internet company to a Chinese-owned buyer? Are there security risks in play here? How should global politics play into international mergers and acquisitions, particularly when we’re talking about one of the largest Internet companies in the world?

[via The Street]