Sir Lucian Grainge: Tencent’s bid to buy 10% of Universal is an ‘exciting development’

Universal Music Group CEO and Chairman, Sir Lucian Grainge (credit: UMG)

Sir Lucian Grainge, CEO and Chairman of Universal Music Group, has responded to the news that China-based Tencent in is discussions to acquire 10% of UMG.

The approach, confirmed by Vivendi this morning, would, if finalized, also grant Tencent the option to buy another 10% of UMG within a year under the same price and terms.

Tencent’s bid puts a €30bn valuation on Universal, Vivendi said.

In a note to UMG staff this morning (August 6) obtained by MBW, Sir Lucian Grainge said: “Today Vivendi announced that they have entered into preliminary negotiations with Tencent for an investment of 10% of UMG’s share capital.

“This is an exciting development for both Vivendi and UMG and affirms once again just how much our strategy and hard work are succeeding. As Vivendi discussed last week with its investors, we continue to deliver remarkable, record-setting results. Our success is driven by placing our recording artists and songwriters at the center of everything we do and providing them with the industry’s best creative and commercial resources on a global basis.

“This is an exciting development for both Vivendi and UMG and affirms once again just how much our strategy and hard work are succeeding.”

“Obviously, we remain part of the Vivendi family – today’s announcement is about a minority investment by Tencent. I can assure you that Vivendi’s Supervisory and Management Boards as well as the Bolloré family continue to be steadfast supporters of our strategy, our work and our teams. And it goes without saying, that our commitment to recording artists and songwriters will continue unchanged.

“Clearly, the possibilities to accelerate and broaden our strategy are exciting. But for now, it’s critical that we remain focused on our important work at hand.

“Thank you once again for your incredible achievements. As validated by this announcement, our results to date have been historic. As we move forward, we will continue to embrace change and disrupt the traditional business, as we build a bright future for ourselves, our artists and our investors.”

Universal Music Group’s recorded music revenues hit a record €2.596bn ($2.93bn) in the first half of 2019, up 22.4% (or 16.9% at constant currency).

Overall half-year revenues at UMG’s wider company – including recorded music, plus publishing, merchandise and more – reached €3.26bn ($3.68bn). That was another all-time record, up 24.0% year-on-year, and 18.6% at constant currency.Music Business Worldwide

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