NEW YORK (TheStreet) -- Yahoo! (YHOO) has agreed to hold onto more Alibaba shares, once the e-commerce giant goes public on the New York Stock Exchange in what is expected to be the largest-ever initial public offering in the United States.
On Tuesday evening, Yahoo! said it has reached an agreement with Alibaba that reduces the maximum number of shares it is required to sell in the IPO. Now, Yahoo! is required to sell 140 million shares, down from a previous requirement that it sell 208 million of its Alibaba shares in the IPO.
The new stipulation appears to be a sign of an improved relationship between Yahoo! and Alibaba as Marissa Mayer has solidified the leadership of the company. Yahoo! said it requested the ability to hold onto more of its Alibaba shares, and the deal disclosed on Tuesday may be beneficial to both companies as the Chinese e-commerce giant moves forward with its IPO.
Yahoo! now has the ability to be a longer-term shareholder in Alibaba. Meanwhile, Alibaba will have a smaller selling shareholder in Yahoo!. Tuesday's deal is similar to an agreement in October that allowed Yahoo! to retain a greater percentage if its Alibaba shares.
Currently, Yahoo! is the beneficial owner of 523,565,416 Alibaba shares, or 22.5% of the company's outstanding stock. Alibaba has not yet announced the timing or pricing of its initial public offering, however, many expect the share listing to come as early as August. Tuesday's amended agreement is unlikely to change any of Alibaba's targets for its IPO.