Largest music label in the world: Tencent buys UMG shares

Dhe French Vivendi group sells 10 percent of its subsidiary Universal Music Group (UMG) Tencent, The agreement was signed on Tuesday, Vivendi said. In addition to the Chinese Tencent Group, other investors who are not specified are involved in the purchase. According to Vivendi, UMG is valued at 30 billion euros. Subject to the approval of the antitrust authorities, the transaction is expected to be completed by the end of the first half of the year.

Benjamin Fischer

The buyer consortium led by Tencent had until January 15, 2021 an option to purchase another 10 percent at the same price, it said. In addition, they are in negotiations about the sale of another minority stake. Talks between Vivendi and Tencent had started in early August. Vivendi’s major shareholder Vincent Bolloré had previously announced that Vivendi could sell up to 50 percent of UMG.

Prominent artists, high sales

The Universal Music Group is ahead of the other two so-called major labels, Sony Music Entertainment and Warner Music, the largest music group in the world and has various prominent musicians under contract, including Taylor Swift, Billie Eilish and Bob Dylan. In 2018, sales of over six billion euros were posted.

Vivendi generated a total of around 13.9 billion euros. According to the announcement, the group hopes that Tencent’s entry will provide better access to the Asian market. In addition to the popular message and payment service Wechat, Tencent also has its own streaming service. The listed subsidiary Tencent Music Entertainment has at least 800 million active users at least once, four times as many as its competitor Spotify. But only around 35 million also pay for the service. Spotify has more than 100 million paying users.

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