Tencent Doubles Stake in Universal Music Group
Francesca Billington is a dot.LA editorial intern. She's previously reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. Before joining dot.LA, she was a communications fellow at an environmental science research center in Sri Lanka. She graduated from Princeton in 2019 with a degree in anthropology.
A consortium including the Chinese-based music platform Tencent Music Entertainment announced Friday it has bought another 10% stake in Universal Music Group, which values the company at 30 billion euros. It bumps the consortium's total stake in the L.A.-based music giant to 20%.
The move will help TME's parent company Tencent broaden its reach as a leading player in music and gaming across China.
"Tencent owns the three largest digital music services in China and has been investing in other services and music-based content around the world," said Larry Miller, a professor music business at NYU Steinhardt. "It provides a view of what is happening on the supply side at the world' largest music company."
The transaction is slated to close in the first half of 2021, subject to regulatory approvals, TME said.
UMG's parent company Vivendi SA also said Friday it has plans to sell additional minority stakes in Universal ahead of a listing in 2022.
The French media conglomerate said it would use cash from these transactions to reduce financial debt and finance share buyback and acquisitions.Last month, Tencent acquired a minority stake in the L.A. virtual concerts company Wave and it also owns stakes in Spotify and Warner Music Group.
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