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Vivendi confirms talks under way for Tencent to take 10% of Universal Music
By Chris Cooke | Published on Tuesday 6 August 2019
Vivendi has announced that it is in “preliminary negotiations” with Chinese web giant Tencent about them acquiring a 10% stake in the Universal Music Group.
The French conglom announced last year, of course, that it was seeking strategic partners interested in buying into its music division, with plans to sell up to 50% of the Universal music business. Vivendi Chair Yannick Bollore confirmed those plans were progressing in an interview in June and then, last month, it was announced that bankers had been appointed to oversee the sale process.
There has been much speculation as to who might bid for a slice of Universal, with Tencent an often mooted bidder. The Chinese firm is the major player in streaming in its home country via an assortment of services, including QQ Music. It also represents many global music right owners in the Chinese digital market and has various other music interests, in China and beyond, including an alliance with Spotify.
In a statement this morning, Vivendi said that it “has entered into preliminary negotiations with Tencent Holdings Limited for a strategic investment totalling 10% of the share capital of Universal Music Group at a preliminary equity valuation of €30 billion for 100% of UMG on a fully-diluted basis. In addition, Tencent would have a one-year call option to acquire an additional 10% at the same price and terms”.
It added that the two companies are also “considering areas of strategic commercial cooperation”. That would include partnerships that could “improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever” and also “identify and promote new talents in new markets”.
Concluding, Vivendi said that “this transaction is subject to due diligence on UMG and finalisation of legal documentation”, while adding that talks with other possible entities also interested in a minority stake in Universal continue.
