Vivendi Plans IPO For Universal Music Group By End of 2021

Lucian Grainge attends Universal Music Group's 2019 After Party - Getty-H 2020
Lester Cohen/Getty Images

The world's largest music label will be traded on the Euronext NV exchange in Amsterdam, assuming the public offering is completed.

The French media conglomerate Vivendi says it plans to spin off Universal Music Group in an IPO by the end of 2021.

UMG, one of the "Big Three" record labels alongside Warner Music Group and Sony Music, is based in Santa Monica, California and led by CEO Lucian Grange.

The company announced the decision in a statement early Saturday morning, adding that the IPO would take place on the Euronext NV exchange in Amsterdam, and that it estimates the value of the record label at $36.4 billion.

UMG's artists include Taylor Swift, Lady Gaga, The Rolling Stones, Alicia Keys, Post Malone, Billie Eilish, Billy Joel, J. Balvin and Coldplay, among many others.

In its statement Saturday, Vivendi added that it would also distribute 60 percent of the company's share capital to existing shareholders. Vivendi owns 80 percent of UMG, with a consortium led by China's Tencent holding the remaining 20 percent. The Tencent consortium had owned 10 percent of the label, but acquired an additional stake in December last year for $3.7 billion.

A special meeting will be held next month to vote on a change to the corporate by-laws, which would allow the transactions to take place. Once those are approved, a separate vote will be scheduled to approve the UMG spinoff and distribution.

The record labels are in the midst of an astonishing corporate resurgence, driven by streaming music services like Spotify and Apple Music, as well as social apps like TikTok and Instagram, which license songs to be used in posts by their users.

Warner Music Group, controlled by Access Industries, had its own IPO last year, raising $1.9 billion at a $15 billion valuation.