Vivendi has entered into preliminary talks with China's Tencent Holdings to sell an initial 10 per cent stake in its Universal Music Group division, the French media giant said Tuesday (Aug. 6).
The negotiations are based on a €30 billion ($33 billion) valuation for UMG, the world's biggest music company, which means Tencent’s stake would cost €3 billion. Tencent also has a one-year "call" option to buy another 10% stake on the same terms.
The proposed deal, should it come to fruition, ought to give UMG's roster of artists a cross-border advantage. "Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever," a statement reads, "as well as identify and promote new talents in new markets." Vivendi says it hopes the new strategic partnership "could create value for both Tencent and UMG."