This will improve Universal Music Group’s (UMG) access to the Asian market.
Universal Music has sold a 10% stake to Tencent Holdings, a Chinese conglomerate. The valuation of this deal is $3.4 billion, placing UMG at $33.6 billion. There will be an option for Tencent to obtain an additional 10% stake by 15 January, 2021.
This move is expected to boost UMG’s and Tencent’s global expansion. The Chinese firm already holds a 7.5% stake in Spotify, and Tencent Music Entertainment announced a music distribution and marketing partnership with SM Entertainments, a top K-pop company in 2019.
Tencent’s stake will give UMG further scope of development in the Asian market. UMG’s chief, Sir Lucian Grainge said that these additional resources will advance their strategy without changing the day-to-day operations.
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