Universal Music are fast approaching an IPO and Chinese giant Tencent has now taken another 10% stake in the major record label.
Not a year since the Chinese conglomerate bought a huge stake in one of the world’s biggest music companies, Tencent Music Entertainment Group (TME) have purchased another 10% stake in Universal Music Group (UMG). Their latest 10% stake is put at a value of around $36.4 billion.
Last year’s stake saw the two huge music purveyors team up to promote Chinese artists by setting up a joint label. That deal gave Tencent the option purchase the additional 10% stake until January this year, which they went for.
Tencent plan to use UMG’s huge library of popular music with their own assets to leverage the content with paying subscribers. TME own some of the biggest music platforms in China, including QQ Music, Kugou Music, Kuwo Music, and WeSing.
Universal Music look ahead to an IPO
Universal Music Group’s Initial Public Offering seems to be approaching. UMG owners Vivendi announced shortly after the confirmation of Tencent’s 10% stock purchase that they would be moving forward with a 2022 IPO for the major record label.
That means that Universal Music Group could be going public as soon as January next year. The long-awaited IPO has gained huge interest from investors, especially after another of the big three record labels – Warner Music Group – went public last year after a decade off of the stock market.
Tencent Music Entertainment group are themselves looking to list themselves in Hong Kong for a second time, with the hopes of earning an equivalent of $3.5 billion US dollars.
Tencent’s global reach
Tencent’s investments show that they have a clear goal in working with the big names in music across the globe. Their 20% stake in Universal Music Group is on top of a 1.6% ownership of Warner Music Group.
Beyond the global scene, Tencent have huge influence in the Chinese market. They own some of the top music services and were reported as having over half a billion total users on their apps and services in May last year.
Local investments have seen them recently look towards the audiobook business. They recently bought out Lazy Audio for $416 million. Lazy Audio is one of the leading audiobook, podcast, and digital radio platforms in China. It continues to run independently but under the ownership of Tencent.