Tencent Set To Double Stake In Universal Music Group To 20%

Tencent

UNIVERSAL MUSIC GROUP parent VIVENDI confirmed that a TENCENT-led consortium will buy an additional 10% stake in the music company. 

The transaction, which will take place during the first half of 2021 subject to regulatory approvals, will take the TENCENT-led consortium’s total percentage of UMG to 20%.

The group closed the acquisition of its first 10% in the music company earlier this year. The additional 10% is being sold to the TENCENT consortium based on a company enterprise value for the music firm of $37bn at current exchange rates.

The consortium also includes TENCENT's majority-owned subsidiary, TENCENT MUSIC ENTERTAINMENT

VIVENDI CEO ARNAUD DE PUYFONTAINE stated the company was  “very happy” the TENCENT consortium has decided to exercise its option to acquire the additional 10% of UMG.

VIVENDI said the deal would “enable UMG to further develop its activities in ASIA...TENCENT and TENCENT MUSIC ENTERTAINMENT will continue to work to broaden artist opportunities and to enrich experiences for music fans, further promoting a thriving music and entertainment industry."

VIVENDI re-confirmed that it is “pursuing its plan to sell additional minority interests in UMG with the assistance of several mandated banks”, and that an IPO for UMG is planned “at the latest in 2022.".

VIVENDI said it may use the cash generated by the TENCENT consortium transactions to reduce its financial debt and to finance share buybacks and acquisitions.

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