Vivendi closes sale of 10% stake in Universal to Tencent
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[March 31, 2020] PARIS
(Reuters) - Vivendi <VIV.PA> closed on Tuesday the sale of a 10% stake
in Universal Music Group (UMG) - home to Taylor Swift and The Beatles -
to a Tencent-led consortium, in a deal giving UMG an enterprise value of
30 billion euros ($33 billion).
The French conglomerate, in which billionaire Vincent Bollore's holding
company has the biggest stake, said it would now examine the possible
sale of other minority interests in UMG, with an initial public offering
of those assets planned for early 2023.
The previously announced deal allows both companies to expand in a
recovering global music market. It gives Tencent more access to U.S.
artists, while UMG can tap into the Asian market, including big-selling
"K-Pop" Korean pop stars.
Although Tencent Music's user base is nearly three times that of Spotify
Technology SA <SPOT.N>, it has fewer paying users.
Earlier this month, Tencent Music Entertainment Group <TME.N> warned it
would likely see "much softer" first-quarter revenue growth due to the
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A woman walks pass by a sign of Vivendi at the main entrance of the
entertainment-to-telecoms conglomerate headquarters in Paris,
France, November 21, 2019. REUTERS/Gonzalo Fuentes
The Tencent consortium also has the option to buy an additional up to 10% of
UMG’s share capital on the same valuation basis until January 15 next year.
Tencent Music Entertainment can also buy a minority share of UMG's subsidiary
housing its Greater China operations.
Vivendi said it plans to use the proceeds from the transactions for substantial
share buyback operations and acquisitions.
($1 = 0.9093 euros)
(Reporting by Sudip Kar-Gupta; Editing by Jason Neely and Jan Harvey)
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