Global telecoms and media giant, Vivendi said it has entered into a preliminary negotiation to sell parts of its stakes in Universal Music to China’s Tencent Holdings.
The company said the preliminary equity valuation for UMG is about€30 billion for 100% of UMG on a fully-diluted basis.
As part of the deal, Tencent would have a one-year call option to acquire an additional 10% at the same price and terms.
“Vivendi and Tencent are also concurrently considering areas of strategic commercial cooperation. In this context, Vivendi is keen to explore enhanced cooperation which could help UMG capture growth opportunities offered by the digitalization and the opening of new markets. Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever, as well as identify and promote new talents in new markets. Vivendi hopes that this new strategic partnership could create value for both Tencent and UMG.”
This transaction is subject to due diligence on UMG and finalization of legal documentation.
Vivendi said it also plans to continue the process for the sale of an additional minority stake in UMG to other potential partners.