The rumors were true: Spotify and Tencent Music are buying minority stakes in each other’s businesses, it’s been confirmed.
The equity arrangement is believed to result in Tencent Music Entertainment Group and Spotify each acquiring 10% in each other’s company.
The deal is believed to see Tencent Music pass Spotify a chunk of cash to account for the different valuations of their companies.
Tencent, which owns a majority stake in TME, operates the most popular social platforms in China.
TME is the largest online music services company in China, serving hundreds of millions of customers.
Daniel Ek, CEO and Founder, Spotify, said, “Spotify and Tencent Music Entertainment see significant opportunities in the global music streaming market for all our users, artists, music and business partners. This transaction will allow both companies to benefit from the global growth of music streaming.”
Cussion Pang, CEO of TME, said: “We are excited to embark on this partnership with the largest music streaming platform in the world. TME and Spotify will work together to explore collaboration opportunities, with a common objective to foster a vibrant music ecosystem that benefits users, artists and content owners.”
Martin Lau, President at Tencent, said: “We are delighted to facilitate this strategic collaboration between the two largest digital music platforms in the world. Both of us share the same commitment to bringing music and superior entertainment experiences to music lovers, and to expanding the global digital music market for artists and content partners.”Music Business Worldwide