Alibaba Group announced today it has bought back half of Yahoo’s 40 percent stake in the Chinese e-commerce giant, completing the first leg of a complex series of agreements reached last May to restructure the relationship between the two companies.

The initial repurchase of shares was valued at about $7.1 billion, with Yahoo receiving about $6.3 billion in cash and $800 million in preference shares in Alibaba Group. Alibaba also paid Yahoo a one-time cash payment of $550 million in connection with an amendment of their existing technology and intellectual property license agreement.

Alibaba Group Chairman and CEO Jack Ma said in a press release the completion of the initial buyback “begins a new chapter in our relationship with Yahoo,” adding that “I look forward to working with [Yahoo President and CEO] Marissa Mayer and her team in our continued partnership.”

Yahoo became a major Alibaba Group shareholder in 2005 in exchange for $1 billion and the sale of its Yahoo! China business to the Chinese company. As part of the agreement struck in May, Alibaba Group has the right to buy back an additional half of Yahoo’s remaining stake if the company goes ahead with an initial public stock offering in the future.

The $7.6 billion Yahoo buyback deal announced today brings the total amount of financing and transactions by Alibaba Group over the past year to $12 billion, including $2.5 billion to take e-commerce platform Alibaba.com private in June. Alibaba Group currently has $3 billion in cash, officials said.

Additional highlights:

— The Yahoo financing package—a mixture of cash, senior debt and the issuance of convertible preference and ordinary shares—is the largest-ever private financing for a private sector Chinese company, and the largest non-LBO private financing for a technology company globally, the company said.

— The new equity financing was completed at an Alibaba Groupvaluation of approximately US$40 billion.

— Alibaba Group CFO Joe Tsai noted in the press release that the company was able to secure funding despite “significant dislocations in the financial markets driven by global macro events and developments specific to China and the Internet industry.” He added: “Our ability to raise financing in these difficult market conditions speaks to the strength of our business, our market leadership position and the confidence our investors and financial partners have in the future of Alibaba.”