Tencent Music acquires Ximalaya in major audio content deal
Tencent has acquired audio giant Ximalaya to strengthen its position in China’s fast-growing digital audio market.
Tencent Music Entertainment Group has announced plans to buy Ximalaya, one of China’s most popular audio platforms, in a deal valued at around US$2.4 billion. The deal will be a mix of cash and stock and marks a major move to boost Tencent Music’s position in the fast-growing online audio market.
According to a report by the South China Morning Post, Tencent Music will pay US$1.26 billion in cash and offer shares amounting to up to 5.2% of its total class A ordinary shares. In addition, 0.37% of shares will be issued to Ximalaya’s founding investors.
The acquisition is still awaiting regulatory approval and will undergo an antitrust review. In preparation, Ximalaya will restructure some of its operations. However, it will continue to run independently. In a statement, Ximalaya said it would “maintain its brand, operational autonomy, core management team and strategic direction.” The company also promised that contracts with partners would be honoured and user rights protected.
Tencent Music is listed both in New York and Hong Kong. Its shares jumped following the news – rising up to 7% in New York pre-market trading. Meanwhile, its shares in Hong Kong had already closed 2.4% higher before the announcement.
Ximalaya, launched in 2012, has become a leading name in China’s online audio world, offering podcasts, audiobooks, music, and radio. Despite several failed attempts to go public – including a US IPO filing in 2021 and multiple Hong Kong applications – the company has stayed profitable. By the end of 2023, it reported five straight profitable quarters, annual revenue of 6.16 billion yuan (around US$857 million), net income of 224 million yuan, and 302 million average monthly users.
Tencent Music, which runs QQ Music, Kugou and Kuwo, saw a revenue rise of 8.7% year-on-year in Q1, reaching 7.36 billion yuan. Its net profit hit 4.39 billion yuan, though monthly active users across platforms dropped by 4% to 555 million. The acquisition of Ximalaya may help Tencent Music regain momentum and expand its reach.
With rivals like Qingting FM, NetEase Music, ByteDance’s Tomato Novel, and other digital reading and podcast platforms gaining ground, the market is highly competitive. Tencent Music said of the deal: “We believe this partnership will unlock new opportunities for Ximalaya’s users, creators, employees, partners and shareholders.” The move could signal more consolidation ahead in China’s booming audio content space.