Vivendi sells Universal Music Group stake to Tencent consortium

Vivendi sells Universal Music Group stake to Tencent consortium

Vivendi has sold a 10 percent stake in Universal Music Group to a Tencent-led consortium, in a deal valuing the label housing Lady Gaga, The Beatles, and Taylor Swift at €30bn (£25.5bn).

The deal allows both companies to expand in the recovering global music market, giving Chinese conglomerate Tencent more access to US artists, while allowing the world’s largest music label to tap into the Asian market.

French media conglomerate Vivendi is looking to capitalise on the music industry’s revival, which has been driven by the rise of subscription and ad-based music streaming services.

 

Vivendi said on Tuesday it had finalised the sale of an initial 10 per cent to the Tencent consortium, which also has the option to buy up to a further 10 per cent by January 2021 on the same price basis.

The initial deal will be followed by a second one allowing Tencent Music Entertainment to buy a minority stake in Universal Music Group’s (UMG) greater China subsidiary.

Financial terms of the deal have not been disclosed, but it gives UMG an enterprise value of €30bn.

Vivdendi did not disclose details of the consortium beyond describing them as “global financial investors”. Tencent did not respond to a Reuters request for comment.

Read more: Private equity giant Carlyle dragged into dispute over Taylor Swift’s past hits

Singaporean state investment firm GIC and Qatar Investment Authority were also involved, a source familiar with the deal told Reuters.

The deal announced today builds on a partnership struck two years ago under which Tencent can license Universal’s music for distribution across its streaming platforms.

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