Warner Music Group Files for IPO

By Anne Steele

Access Industries Inc.'s Warner Music Group Corp. filed documents to sell shares to the public amid a streaming-fueled resurgence in the music industry.

The third-largest music company's decision to pursue an IPO comes after Vivendi SA sold a 10% stake in Universal Music Group to Tencent Holdings Ltd. for EUR3 billion ($3.36 billion), valuing the world's largest music company at over $33 billion.

Access, owned by billionaire Len Blavatnik, is to retain voting control of Warner Music, according to the company's filing Thursday with the Securities and Exchange Commission.

The Russian-born business magnate bought Warner Music Group in 2011 for $3.3 billion. It was previously controlled by a trio of private-equity firms -- Thomas H. Lee Partners, Bain Capital Partners and Providence Equity Partners -- together with the company's then-chief executive, Edgar Bronfman Jr., who bought the company from what was then Time Warner Inc. in 2004 for $2.6 billion.

Warner Music's labels include Elektra Records, Atlantic Records and its flagship Warner Records. It also owns Warner Chappell Music, the third-largest music publisher. Its roster of artists includes Ed Sheeran, Lizzo, Madonna, Metallica and Neil Young.

The fortunes of record companies -- Warner and Universal together with Sony Corp.'s Sony Music Entertainment round out the "big three" with control of some 80% of the market -- have been resuscitated in recent years thanks the rise of music-streaming services such as Spotify Technology SA and Apple Inc.'s Apple Music. While revenue from recorded music remains below its CD-fueled peak in 2000, it has been on the rise since 2016 following more than a decade of declines due to piracy.

In 2018, the last full year of available data, world-wide recorded music revenue totaled $19.1 billion. Goldman Sachs estimates the market will hit $45 billion by 2030, primarily on the strength of subscriptions to streaming services.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

February 06, 2020 18:44 ET (23:44 GMT)

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