This deal will have a consortium of investors led by Tencent acquiring a 10% stake in Universal Music Group (UMG). That deal also includes an option that allows the company to purchase an additional 10% under the same conditions until Jan. 15, 2021.
The Universal Music deal doesn’t stop here. There will also be a second agreement between Vivendi and Tencent Music Entertainment as well. This agreement will allow that group to acquire a minority share capital in a UMG subsidiary that will operate in Greater China. These deals are expected to close during the first half of 2020.
Vivendi says that the Universal Music deal will allow the group to grow in Asian markets by moving into China. There are also plans for it to work alongside Tencent in developing better experiences for music fans and helping more artists expand their reach.
This isn’t the only Universal Music deal that Vivendi is announcing today. The company says it is also working on another minority stake deal that will at least match this one in price. It was brought to the attention of the Vivendi Supervisory Board on Dec. 23 and negotiations are already underway.
VIVHY stock was up slightly after-hours on Tuesday. TCEHY stock closed out the day down 1.25% and is largely unmoving after markets closed today.
As of this writing, William White did not hold a position in any of the aforementioned securities.