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Tencent-led consortium closes investment in Universal Music Group

Mar 31, 2020 by The Passage Team
Tencent-led consortium closes investment in Universal Music Group

Tencent Holdings Limited has announced that a Tencent-led consortium (the "Consortium") has completed the acquisition of a 10% equity stake in Universal Music Group from Vivendi SE, based on an enterprise value of EUR30 billion for 100% of UMG's share capital, three months after the signing of the agreement on December 31, 2019.

The Consortium includes Tencent Music Entertainment Group and other financial co-investors. The Consortium has the option to acquire up to an additional 10% equity stake in UMG at an equivalent enterprise valuation until January 15, 2021. TME and UMG have also entered into a separate agreement whereby TME has an option to acquire a minority equity stake in UMG's Greater China business within two years after the closing day of the Transaction.

The Consortium will support UMG's growth through this investment and believes that the long-term growth potential of the music industry remains intact despite macro-economic challenges. With the support of Vivendi, Tencent and TME will work together with UMG to further promote a thriving entertainment industry by developing innovative forms of music engagement and broadening opportunities for artists.

Morgan Stanley acted as the exclusive financial advisor to the Consortium and the sole structuring agent to the financing. Davis Polk & Wardwell acted as the legal advisor, Deloitte acted as the accounting and tax advisor, and FTI Consulting acted as the commercial advisor to the Consortium. Financing banks include Bank of China, ICBC, Bank of America, HSBC and Morgan Stanley.

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