A consortium led by Tencent will buy an additional 10% stake in Universal Music Group (UMG) from French media conglomerate Vivendi, increasing their holding in the record label to 20%, as Tencent aims to dominate the Chinese music streaming market, according to a statement on Friday.
In March, the Tencent-led group completed the initial purchase of a 10% stake in UMG with an option that allows them to acquire an additional 10% on the same valuation basis until January 15, 2021.
Tencent Music Entertainment Group (TME), a subsidiary of Tencent, will take part in the new transaction, which is expected to close in the first half of 2021 and is subject to regulatory approvals, TME said in a separate statement on Friday.
“The transaction reinforces TME’s commitment to strengthening its strategic partnership with UMG. TME looks forward to an ongoing and deeper collaboration with UMG as both companies work together to bring unparalleled service and product offerings to artists and fans in China’s booming music entertainment market,” TME said.
In August, TME said it was setting up a joint venture music label with UMG to develop and showcase domestic artists and their original music in China.
Tencent, which runs businesses across various industries including social media, gaming and cloud services, has been investing in some of the world’s music giants with the goal of gaining the access to their music libraries needed to cement its position as a top music services provider in China.
Contact reporter Ding Yi (email@example.com)