Tuesday, August 6, 2019

Tencent in talks to buy 10% of Universal Music Group | Music Business Worldwide

Chinese media giant Tencent Holdings Limited is in discussions to buy 10% of Universal Music Group, UMG’s parent Vivendi has confirmed today (August 6).

Tencent has made an offer which puts a preliminary equity valuation of €30bn ($34bn) on UMG on a fully-diluted basis.

Its offer for 10% is therefore worth €3bn.

If the deal is finalized, Tencent would also have a one-year call option to acquire an additional 10% of UMG at the same price and terms.

In a statement, Vivendi added: “Vivendi and Tencent are also concurrently considering areas of strategic commercial cooperation. In this context, Vivendi is keen to explore enhanced cooperation which could help UMG capture growth opportunities offered by the digitalization and the opening of new markets.

“Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever, as well as identify and promote new talents in new markets. Vivendi hopes that this new strategic partnership could create value for both Tencent and UMG.”

This transaction is subject to due diligence on UMG and finalization of legal documentation. In addition to these discussions, Vivendi also plans to continue the process for the sale of an additional minority stake in UMG to other potential partners.Music Business Worldwide

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