Universal Music Group IPO coming ‘early 2022 at the latest’; Tencent completes acquisition of further 10% in UMG

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

A Tencent-led consortium has completed its acquisition of an additional 10% in Universal Music Group, both Tencent and UMG parent Vivendi announced this morning (January 29).

As previously announced, the Tencent consortium has acquired the shares in UMG for €3 billion based on a €30 billion enterprise valuation of the music company.

The acquisition takes the Tencent consortium’s holding in UMG from 10% to 20%, and reduces UMG parent Vivendi’s ownership stake in the music firm to 80%.

Within its announcement of the Tencent news this morning, Vivendi also suggested that that the proposed ‘spin-out’ IPO of Universal Music Group could happen this year.

“Following the success of this significant strategic transaction, a UMG listing is planned in early 2022 at the latest,” said Vivendi. (We already knew Vivendi was planning a Universal IPO before an unspecified point in 2022; The words “early 2022 at the latest” today are new information.)

“Following the success of this significant strategic transaction, a UMG listing is planned in early 2022 at the latest.”

Vivendi statement today (January 29)

Vivendi and Tencent additionally said in a joint press release today: “Vivendi has enjoyed the presence of Tencent and its co-investors at UMG’s share capital since March 2020 and is very happy that the Consortium decided to take a larger participation. This will notably enable UMG to further develop its activities in Asia.

“Tencent and the Consortium members are delighted to support UMG’s growth through this additional investment. Together with Vivendi, Tencent and Tencent Music Entertainment will continue to work to broaden artist opportunities and to enrich experiences for music fans, further promoting a thriving music and entertainment industry.”

The cash generated by the transactions may be used by Vivendi to reduce its financial debt and to finance acquisitions.

Vivendi revealed in October that Universal – led by Chairman & CEO, Sir Lucian Grainge – generated €992m ($1.14bn) in recorded music streaming revenues in the three months to end of September.

This figure was up by 22.6% in organic terms on the prior year quarter.

Universal Music Group rival Warner Music Group floated a portion of its company on the NASDAQ in June last year.

Prior to trading today, Warner Music Group shares were trading at $35.09, up 16.5% from a $30.12 close on the company’s first day of trading on June 3, 2020.Music Business Worldwide

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