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Tencent’s Universal Music stake could go up to 30%

By | Published on Friday 20 December 2019


Chinese web giant Tencent could end up with up to 30% of the Universal Music Group, sources say, as a result of it securing different financial backers for its bid to get a slice of the global music rights business.

Universal Music owner Vivendi has been seeking to sell a chunk of its music company for a while now, of course. Tencent, a dominant player in the Chinese streaming market with global ambitions, was quickly tipped as a possible buyer.

Then, in August, Vivendi confirmed that it was in advanced talks with Tencent about it taking a 10% stake in Universal, with an option to buy an additional 10% down the line.

According to Reuters, sources say that that deal almost fell apart recently when investment funds meant to back the share purchase – including US private equity outfits KKR and Hellman & Friedman – walked away from the transaction.

However, Tencent is now reportedly working with Singapore’s state investor GIC and other sovereign funds in a bid to rescue the deal and, as an outcome of that, the stake it takes could go up, giving the Chinese company 20-30% of the Universal music business.

The sources add that all sides have been trying to fast-track talks so to secure a deal this side of Christmas, but things could now slip into the new year.

In Europe, indie label repping IMPALA has already expressed concerns about the deal on competition law grounds. Any move to increase Tencent’s stake in Universal will only add to those concerns.