Tencent Holdings Ltd.
TCEHY -0.58%
he doubles his stakes in the music giant behind Ariana Grande and Billie Eilish.
Chinese internet company said on Friday that it is leading a consortium that has agreed to buy an additional 10% stake in Universal Music Group from Vivendi VIVHY 1.93%
SE, in an agreement that estimates the largest music business in the world at 30 billion euros, the equivalent of 36.8 billion dollars.
The agreement supports Tencent’s growing presence in the record industry and its exposure to some of the biggest names in music. Universal Stable also includes classic acts such as Queen and the Beatles and recently purchased Bob Dylan’s entire editorial catalog.
The acquisition comes almost a year after the Tencent-led consortium, which includes its streaming business Tencent Music Entertainment Group and other undisclosed investors, first bought a 10% stake in Universal. That agreement included an option to purchase an additional share of up to 10% at the same valuation.
Tencent and Vivendi also signed a separate agreement in March, allowing Tencent Music to acquire a minority stake in Universal, which owns Greater China’s record label operations.
The Chinese company also bought a small stake in Warner Music Group earlier this year. Body.
, home to celebrities, including Cardi B, Ed Sheeran and Lizzo.
For Vivendi, Friday’s agreement strengthens a relationship with Tencent that it hopes will allow Universal to further expand its operations in Asia, with companies working together to expand opportunities for artists.
The sale of stakes also allows the French media conglomerate, which will retain an 80% stake in Universal, to continue to cash in on a revitalized music industry.
Owning and selling music rights has become more valuable in recent years, as revenue from music streaming on services such as Spotify Technology SA and Apple Music Apple Inc. has increased.
Vivendi, whose operations cover television and video game production to marketing, said it could use the proceeds from the transaction to pay off debt, buy shares and buy funds.
He also said he would now look to sell additional minority stakes in Universal, which he plans to list on the stock market by 2022 at the latest.
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8