Vivendi Confirms Tencent’s Interest In Universal Music Group

One of many artists on UMG
Matt Sayles / Invision / AP
– One of many artists on UMG
Performing during the Grammy Awards at Madison Square Garden in NYC Jan. 28.

Chinese internet giant Tencent Holdings Limited wants 10% of Vivendi’s shares in the world’s largest recorded music company Universal Music Group. Negotiations started today.
The bid by Tencent would place UMG at a valuation of $30 billion, making the potential acquisition a several billion dollar deal. 
If the deal goes through, Tencent would have a one-year call option to acquire an additional 10% at the same price and terms.
According to the announcement by Vivendi, the French media giant and Tencent are also considering areas of strategic commercial cooperation. 
“Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever, as well as identify and promote new talents in new markets,” the Vivendi statement reads. 
The deal is subject to due diligence on UMG and finalization of legal documentation. 
Vivendi plans to sell an additional minority stake in UMG to other potential partners.
Vivendi’s recently published half-year result show a significant increase in group revenues, fueled in particular by the growth of UMG’s business, which grew 18.6% on an organic basis, year-on-year.
Ticketing revenues amounted to €33 million, an increase of 30.2% compared to the first half of 2018 thanks in particular to the acquisition of Paylogic in April 2018, which grew by 11.6% at constant currency and perimeters. 
Vivendi states that its live arm, Vivendi Village, now has an integrated ticketing network of 14 offices in Eight countries in continental Europe, the United Kingdom and the United States.