Tencent-led consortium acquires 10% of Universal Music Group from Vivendi

A Tencent-led consortium has acquired a 10% equity stake in Universal Music Group (UMG) from Vivendi, at an enterprise value of about US$33 billion. The Tencent-led consortium is joined by Tencent Music Entertainment Group and global financial investors.

Until 15 January 2021, the consortium will be given an option to acquire up to an additional 10% equity stake in UMG at the same enterprise value as in the earlier transaction. Prior to the closing of the consortium-UMG transaction, Tencent Music Entertainment Group and UMG also were in talks to enter into a second agreement that grants Tencent Music Entertainment Group an option to acquire a minority equity stake in UMG's Greater China business. This transaction will be subject to the receipt of regulatory approvals and other customary closing conditions, and is expected to close by the end of the first half of 2020.

According to a media statement, Vivendi is "happy" with the arrival of Tencent and its co-investors, as it will enable UMG to further develop in the Asian market. "Tencent and the consortium members are excited to support UMG's growth through this investment. Together with Vivendi, Tencent and Tencent Music Entertainment Group will work to broaden the opportunities for artists and to enrich experiences for music fans, further promoting a thriving music and entertainment industry," a statement by Tencent read.

Most recently, UMG extended its footprint in Asia by opening its regional headquarters for Southeast Asia in Singapore. The operations will be under the leadership of Calvin Wong, CEO of Universal Music Southeast Asia and SVP Asia. The Singapore office will provide support for UMG’s operations locally as well as in Malaysia, Indonesia, Indochina, Thailand, and the Philippines.

Through this, UMG aims to accelerate the company’s focus on growing the music ecosystem including recorded music, music publishing, production, live events, brand partnerships and merchandising efforts throughout the region. According to UMG, the expansion of UMG’s artists and repertoire, commercial and marketing capabilities will provide domestic artists access to the company’s global infrastructure and network around the world, as well as ensuring that its international repertoire can reach audiences throughout the region.