Tencent Doubles Stake in Universal Music Group -- Update
December 18 2020 - 11:02AM
Dow Jones News
By Mauro Orru
Tencent Holdings Ltd. is doubling its stake in the music giant
behind Ariana Grande and Billie Eilish.
The Chinese internet company said Friday it was leading a
consortium that had agreed to buy an additional 10% stake in
Universal Music Group from Vivendi SE, in a deal that values the
world's largest music business at 30 billion euros, equivalent to
$36.8 billion.
The deal bolsters Tencent's growing presence in the record
industry and its exposure to some of the biggest names in music.
Universal's stable also includes classic acts such as Queen and the
Beatles, and it recently bought Bob Dylan's entire publishing
catalog.
The purchase comes nearly a year after the Tencent-led
consortium, which includes its streaming business Tencent Music
Entertainment Group and other undisclosed investors, first bought a
10% stake in Universal. That deal included an option to buy an
additional stake of up to 10% at the same valuation.
Tencent and Vivendi also signed a separate agreement in March
enabling Tencent Music to acquire a minority stake in the Universal
subsidiary that owns the record label's Greater China
operations.
The Chinese company also earlier this year purchased a small
stake in Warner Music Group Corp., home to stars including Cardi B,
Ed Sheeran and Lizzo.
For Vivendi, Friday's deal cements a relationship with Tencent
that it hopes will enable Universal to further develop its
activities in Asia, with the companies working together to broaden
opportunities for artists.
The stake sale also allows the French media conglomerate, which
will retain an 80% stake in Universal, to further cash in on a
resurgent music industry.
Owning and selling rights to music has become more valuable in
recent years as revenue from music streaming on services such as
Spotify Technology SA and Apple Inc.'s Apple Music has grown.
Vivendi, whose operations span television and videogame
production to marketing, said it could use the proceeds from the
deal to pay down debt, buy back shares and fund acquisitions.
It also said it would now seek to sell additional minority
interests in Universal, which it plans to list on the stock market
in 2022 at the latest.
(END) Dow Jones Newswires
December 18, 2020 10:47 ET (15:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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