UMG, Tencent Make $33 Billion Deal
• In the culmination of a deal that has been in the works since early August, Universal Music Group has formally sold a 10% stake to a consortium led by Chinese company Tencent in a transaction estimated at $33.6 billion.
Variety reports that UMG’s parent company Vivendi also announced that the consortium has the option to buy another stake of up to 10% at the same price by January 15, 2021. Vivendi said Tencent’s music division will also buy a minority stake in UMG’s operation in China, enabling the company to further bolster its presence in the Asian market.
In a joint statement, the company said, “Tencent and the Consortium members are excited to support UMG’s growth through this investment. Together with Vivendi, Tencent and TME will work to broaden the opportunities for artists and to enrich experiences for music fans, further promoting a thriving music and entertainment industry.”
In a staff memo, UMG Chairman & CEO Lucian Grainge said, “With the exception of additional resources to further advance our strategy, everything else will remain the same: our strategic vision; our company, label and business unit names; our locations; and of course, our outstanding people.” Grainge added, “This is an exciting development reflecting a strong validation of our business strategy, our incredible team and your excellent work. It also reflects our shared optimism about UMG’s continued role as the driving force in our industry and how focused we are on the future.”
