Tencent Music acquires an additional 10% stake in Universal Music: report

The additional stake has an enterprise value of 30 billion euros (US$36.4 billion) and it has pushed the TME consortium’s equity ownership to 20%.

The TME consortium bought its initial 10% stake in UMG in January last year after the companies had established a joint label to promote Chinese artists. As per the deal, the consortium had the option to purchase an additional 10% equity stake until January 15, 2021.

The joint label was meant to reduce TME’s licensing fees by allowing it to produce its own content.

The Chinese tech giant’s music arm expects to leverage UMG’s vast content library, along with its own 47.1 million paying user base.

It also looks to ramp up its audio content, forming strategic partnerships with China Literature and other online literary platforms to add more audiobooks to its library.

Recently, TME acquired the audiobook platform Lazy Audio for 2.7 billion yuan (US$417 million), pushing up the Chinese firm’s share price on the New York Stock Exchange.

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TME operates music applications QQ Music, Kugou Music, Kuwo Music, and WeSing in China, while UMG owns the music rights of popular western artists such as The Beatles, Queen, Taylor Swift, and Billie Eilish.

TME is also looking to raise up to US$3.5 billion as it seeks a secondary listing in Hong Kong, though it doesn’t have a listing timetable yet.