• A group led by Tencent is buying a 10% stake in Vivendi’s Universal Music Group for 3 billion euros ($3.4 billion), both companies announced Tuesday.
  • The sale values the world’s largest music company at 30 billion euros ($33.6 billion).
  • The consortium of investors holds the option to boost their stake to as much as 20% of Universal at the same valuation by January 15, 2021, according to the statement.
  • Universal’s artist roster includes Lady Gaga, The Beatles, J Balvin, and Adele, among others.
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A consortium led by Chinese conglomerate Tencent is buying a 10% stake in Vivendi’s Universal Music Group for 3 billion euros ($3.4 billion), the companies announced Tuesday.

The sale values the world’s largest music company at 30 billion euros ($33.6 billion). The purchase is the first major stake taken since French media giant Vivendi said in July 2018 it plans to sell as much as half of the music company.

The deal also gives the investing group an option to boost its stake to as much as 20% at the same valuation until January 15, 2021, according to the statement. The deal is expected to close in the first half of 2020 and is subject to regulatory approval.

Tencent will gain the ability to license Universal’s artists for distribution on its own streaming services. The investment gives Universal a new partner for expanding its Asian audience.

The music company’s artist roster includes Lady Gaga, Ariana Grande, The Beatles, J Balvin, Adele, and J. Cole, among many others.

Vivendi has enjoyed steady gains from the music corporation. Streaming services have quickly become the music industry’s biggest revenue driver, and label sales have surged an average 7% each year since 2014 as the subscription services became the new standard, according to Bloomberg.

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Singapore and Qatar’s respective state investment firms were also involved in the deal, sources familiar with the matter told Bloomberg in November. Vivendi first revealed discussions with Tencent in August.

Vivendi stock traded roughly 0.2% lower in Paris as of 8:40 a.m. ET Tuesday. Tencent stock closed roughly 1.3% lower on Monday.

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