Tencent in talks to buy stake in Universal Music Group
The French media conglomerate behind Universal Music Group (UMG) is in talks to sell a chunk of the music company to Chinese tech giant Tencent.
Vivendi said the deal, which would give Universal a total equity value of €30bn (£27.6bn), will help boost the firm’s presence in Asia.
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Universal is the world’s largest music company, and boasts a vast roster of artists including Taylor Swift, Lady Gaga, Drake and Kanye West.
The deal would also give Tencent a one-year call option to buy a further 10 per cent stake at the same price.
Shares in Vivendi jumped almost seven per cent this morning, as investors welcomed the move.
The French firm, which is controlled by billionaire Vincent Bollore, is looking to cash in on growing demand for subscription and ad-based music streaming services, which have driven Universal’s profit over the last four years.
“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,” the company said in a statement.
The move would be a boost for Tencent’s music division, dubbed the ‘Chinese Spotify’, which listed in New York last year in a bumper $21.3bn (£17.5bn) float.
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Vivendi first announced plans to sell part of Universal a year ago, but made little progress until it selected investment banks last month to start a formal sale process.
The group said it is also exploring the sale of an additional minority stake to other buyers.
Main image credit: Getty