Universal Music Group will sell half of its equity stake in Spotify and use the proceeds to help fund an expanded share buyback program totaling EUR €1 billion (USD $1.17 billion), the company confirmed on Wednesday (April 29) alongside its Q1 2026 results.
The decision comes three weeks after Bill Ackman‘s Pershing Square launched a $64 billion takeover bid for UMG that proposed liquidating the company’s entire Spotify stake to help fund the deal.
UMG‘s board has yet to make a decision on the Ackman proposal.
A UMG press release on Wednesday confirmed: “Consistent with the Company’s approach to artist compensation, artists will share in the proceeds. UMG’s share will initially be directed towards its buyback program.”
That commitment to artist participation in any Spotify sale dates back to 2018.
Later that year, at the request of Taylor Swift, UMG agreed to distribute any proceeds to its artists on a non-recoupable basis, matching a policy previously adopted by Sony Music.
According to UMG‘s 2025 annual report, the company holds 6,487,000 Spotify shares — equivalent to a 3.10% stake in the streaming platform — valued at €3,214 million as of December 31, 2025.
Based on Spotify‘s closing share price on Tuesday (April 28), 50% of UMG‘s stake is currently worth approximately $1.4 billion (€1.2 billion).
However, that comes after Spotify‘s shares fell double-digits on Tuesday after the streaming platform’s Q2 operating-income guidance landed below Wall Street expectations.
The expanded buyback authorization brings UMG‘s total share repurchase commitment to €1 billion — doubling the €500 million program announced on March 30.
The additional €500 million authorization is subject to shareholder approval at UMG‘s 2026 Annual General Meeting on May 13.
UMG said its board “considers UMG’s share price to be undervalued relative to its business performance and prospects.”
Pershing Square has cited the same valuation gap as the rationale for its takeover proposal: UMG‘s shares are down approximately 30% over the past year, despite continued growth in its underlying business.
“The important steps we are announcing today to increase our share buyback authorization and monetize a portion of our equity stake in Spotify will lead to enhanced shareholder value while maintaining the flexibility the Company requires to drive further success,” said Matt Ellis, UMG‘s CFO.
On Wednesday’s call, Grainge said the Spotify monetization “underscores the importance of our capital discipline, the expected returns from our buybacks and our confidence in the long-term growth of UMG, as well as the broader music ecosystem.”
The UMG chief added that the company would not be commenting further on the Ackman proposal until the board completes its review.
UMG‘s Q1 2026 revenues came in at €2,900 million ($3.39 billion), flat year-over-year and up 8.1% in constant currency, partly reflecting the consolidation of Downtown Music Holdings, plus “initial pricing benefits of Streaming 2.0 agreements”.Music Business Worldwide