The future is bright for Universal Music Group and everyone connected with the giant music company. But right now, it’s business as usual.
That’s the message from UMG chairman and CEO Lucian Grainge, who addressed employees as its parent Vivendi announced it has entered into talks with China’s Tencent Holdings on a partial sale of the music major.
On Tuesday morning, Vivendi confirmed it had started preliminary negotiations with Tencent for an investment of 10% of UMG’s share capital, worth more than $3 billion.
In a company-wide memo circulated soon after, Grainge thanked staff for “delivering remarkable, record-setting results,” and asserted the talks were an “exciting development” for Vivendi and UMG. The music giant, he said, will remain a valued member of the “Vivendi family.”
“I can assure you that Vivendi’s supervisory and management boards as well as the Bolloré family continue to be steadfast supporters of our strategy, our work and our teams,” Grainge’s memo reads. “And it goes without saying, that our commitment to recording artists and songwriters will continue unchanged.”
According to a statement issued Tuesday morning under the headline, “Vivendi enters into preliminary negotiations with Tencent,” the French entertainment conglomerate said negotiations are based on a €30 billion ($33 billion) valuation for UMG, the world’s biggest music company. Also, Tencent would have a one-year “call” option to acquire an additional 10% at the same price and terms.
“Clearly,” reads Grainge’s internal note, seen by Billboard, “the possibilities to accelerate and broaden our strategy are exciting. But for now, it’s critical that we remain focused on our important work at hand.”
Read Lucian Grainge’s message to staff below.
Today Vivendi announced that they have entered into preliminary negotiations with Tencent for an investment of 10% of UMG’s share capital.
This is an exciting development for both Vivendi and UMG and affirms once again just how much our strategy and hard work are succeeding. As Vivendi discussed last week with its investors, we continue to deliver remarkable, record-setting results. Our success is driven by placing our recording artists and songwriters at the center of everything we do and providing them with the industry’s best creative and commercial resources on a global basis.
Obviously, we remain part of the Vivendi family—today’s announcement is about a minority investment by Tencent. I can assure you that Vivendi’s Supervisory and Management Boards as well as the Bolloré family continue to be steadfast supporters of our strategy, our work and our teams. And it goes without saying, that our commitment to recording artists and songwriters will continue unchanged.
Clearly, the possibilities to accelerate and broaden our strategy are exciting. But for now, it’s critical that we remain focused on our important work at hand.
Thank you once again for your incredible achievements. As validated by this announcement, our results to date have been historic. As we move forward, we will continue to embrace change and disrupt the traditional business, as we build a bright future for ourselves, our artists and our investors.