Tuesday, December 31, 2019

Sir Lucian Grainge: After Tencent deal ‘our strategic vision remains the same’ | Music Business Worldwide

Earlier today (December 31), the biggest music biz news story of the year broke: a Consortium led by China’s Tencent Holdings has inked an agreement to purchase a 10% stake in Universal Music Group for over $3bn.

Other key elements of the deal: the Consortium can, over the next 12 months, buy a further 10% stake, while majority-owned subsidiary, Tencent Music Entertainment, is also in separate discussions to acquire a minority stake in Universal’s operations in Greater China.

Now, thanks to a press release issued by Universal itself, further details have come to light – not least this fact: “The Vivendi Supervisory Board was informed on Monday, December 23, 2019, that negotiations were beginning concerning the potential sale of an additional minority share for a price which would at least be identical.”

In other words, it sounds like additional potential buyers of minority stakes in UMG are still in the game and may yet acquire further pieces of the company.

MBW has just obtained a statement from UMG boss Sir Lucian Grainge, sent to Universal’s global workforce in the past couple of hours, addressing today’s news.

You can read it in full below.

Dear Colleagues,

I wanted to write you directly to highlight today’s announcement from Vivendi of a successful investment in Universal Music Group by a consortium led by Tencent.

Details are included in the below press release, but they are essentially in line with Vivendi’s prior statements on this matter: the consortium of investors will purchase 10% of the share capital of UMG with UMG’s full enterprise value set at €30 billion. Vivendi also announced that the Tencent-led consortium has the option to acquire up to an additional 10% of UMG’s shares by January 15, 2021, as well as a second agreement that allows Tencent Music Entertainment to acquire a minority of a UMG subsidiary company that includes our operations in Greater China.

With the exception of additional resources to further advance our strategy, everything else will remain the same: our strategic vision; our company, label and business unit names; our locations; and of course, our outstanding people.

This is an exciting development reflecting a strong validation of our business strategy, our incredible team and your excellent work. It also reflects our shared optimism about UMG’s continued role as the driving force in our industry and how focused we are on the future.

I will continue to keep you appraised of any further developments. In the meantime, thank you again for all you do.

LucianMusic Business Worldwide

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