Vivendi Closes $3.3 Billion Sale of 10 Percent Universal Music Stake to Tencent-Led Consortium

Tolga AKMEN / AFP / Getty Images
Universal Music Group's artist roster includes Billie Eilish

The company will now pursue the possible sale of additional minority stakes in the music major and plans an initial public offering for it by early 2023.

French entertainment and telecom conglomerate Vivendi said Tuesday that it has closed its sale of a 10 percent stake in Universal Music Group to a consortium led by Chinese online giant Tencent.

It confirmed the deal was based on an enterprise value of €30 billion, or $33 billion at current exchange rates, compared with $33.6 billion when the transaction was announced at the end of 2019. That values the sold stake in the music major, whose artist roster includes Billie Eilish, at $3.3 billion.

The consortium buying the stake is led by Tencent and includes Tencent Music Entertainment and "other financial co-investors," the companies said. Vivendi said it plans to use the proceeds from the transaction and possible further deals around UMG for "substantial" stock buybacks and acquisitions.

The deal partners also confirmed a separate agreement that gives Tencent Music Entertainment the right to acquire a minority stake in UMG’s unit housing its Greater China operations.

"Vivendi is very happy with the arrival of the Tencent-led consortium," the company said. "It will enable UMG to further develop in the Asian market."

Vivendi on Tuesday also reiterated previous comments that it would "pursue the possible sale of additional minority interests in UMG" with the help of several banks. Plus, an initial public offering for UMG is still in focus for the company down the line. Vivendi said it was "currently planned for early 2023 at the latest."