Music. Tencent of China, internet and tech giant, is to acquire a ten per cent stake in Universal Music as the company expands its reach within the global music industry. Vivendi, owner of Universal Music, announced the discussions. The deal values the music company at €30bn and the deal would give Tencent an option to double its stake within a year on the same terms. It reflects renewed interest in the music sector after declining sales and increasing piracy, and indicates Tencent’s desire to create commercial access to the Chinese music space where tastes are local and piracy is rampant.
Vivendi also announced it is to explore other areas of potential cooperation with Tencent including the ‘opening of new markets’. The deal indicates a move by Tencent towards content acquisition rather than technology. The company already backs music services in a number of international markets. Universal Music publishes music from artists ranging between The Beatles to Taylor Swift. The recent success of Billie Eilish, Ariana Grande and the soundtrack to A Star Is Born have boosted results with first half results rising tp €3.3bn of revenue and €481m EBITDA. Universal accounts for 67% of Vivendi’s profit.