Tencent and Spotify, two global leaders in digital music, have formally agreed to buy minority equity stakes in each other, it was announced on Friday. In a joint statement, Tencent's music subsidiary, Tencent Music Entertainment, and Spotify said they would acquire new shares in each other for cash, with the Chinese giant investing in Spotify via secondary purchases.
When those transactions are complete, all parties will hold minority stakes in each other, though they did not disclose exact figures. Over the past week, it has been widely reported that TME and Spotify will end up with 10 percent stakes in each other, though that can't be confirmed.
Spotify's current valuation is up for debate, though it has continued to rise throughout the year as the company prepares to go public. In September, it was reported that private trades in Spotify shares pegged the company at about $16 billion. Last month, Tencent surpassed Facebook to become the globe's fifth-most valuable company, at more than $500 billion.