Universal Music Group chairman and CEO Lucian Grainge has hailed today's confirmation of Tencent’s investment in UMG, calling it a "strong validation of our business strategy." In a memo to staff, Grainge outlined the details of the arrangement, which include a sale of 10% of the share capital of UMG to a Tencent-led consortium, based on a €30 billion ($33.6 billion) valuation of the music giant.
Tencent also has an option to buy another 10% stake on the same terms, but must do so by Jan. 15, 2021. An additional agreement is already in the works that would allow Tencent Music, a joint venture of Tencent Holdings and Spotify, to acquire a minority share capital of UMG’s subsidiary in Greater China.
Grainge said Tencent's investment gives UMG the ability increase resources to “advance our strategy,” however, “everything else will remain the same.”