VIV Vivendi SE

   By Mauro Orru 
 

Vivendi SE said Friday that it is selling an additional 10% stake in its subsidiary Universal Music Group--the music giant behind Ariana Grande and Billie Eilish--to a consortium led by Tencent Holdings Ltd. for 3 billion euros ($3.68 billion), bringing its total shareholding to 20%.

The European media giant said the agreement is based on an enterprise value of EUR30 billion for 100% of UMG's share capital, meaning it is selling the 10% stake for EUR3 billion.

Closing and payment should take place during the first half of 2021, subject to regulatory approvals.

The news comes nearly a year after Vivendi announced the first 10% stake sale to the consortium, which includes Tencent Music Entertainment Group, for the same price.

Under the initial agreement, which closed in March this year, the consortium had the option to buy an additional stake of up to 10% in UMG on the same valuation basis until Jan. 15.

A separate agreement was also signed in March enabling Tencent Music Entertainment to acquire a minority stake in the capital of the UMG subsidiary owning its Greater China operations.

The deal bolsters Tencent's exposure to some of the biggest names in music--Universal's stable also includes classic acts such as Queen and the Beatles.

Bob Dylan recently sold his entire publishing catalog--including more than 600 copyrights spanning 60 years--to Universal. While terms of the deal weren't disclosed, the catalog is likely worth hundreds of millions of dollars.

Tencent Music Entertainment Group, the tech giant's streaming business, went public in the U.S. in December 2018 in one of that year's highest-profile listings.

Details of the negotiations with Tencent emerged in August 2019, a year after Vivendi said it would embark on a search for buyers to sell up to 50% of its music subsidiary.

The company said it is planning additional minority interests sales in UMG, for which a listing is planned at the latest in 2022.

Vivendi said cash from the two stake sales could be employed to cut financial debt, and finance share buybacks and acquisitions.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

December 18, 2020 03:24 ET (08:24 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.