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Vivendi Plans to Sell Up to Half of Universal Music Group, Rules Out IPO

French media conglomerate Vivendi announced on Monday it would seek out buyers to purchase up to half of its music unit, Universal Music Group. Contained in a section of its mid-year financials on the "future evolution" of UMG's share capital, Vivendi said it will soon be engaging banks in order to help identify potential "strategic partners," and that it hoped a transaction can be made this fall with a target completion date within the next year and a half.   

The announcement of intent to sell 50 percent of UMG's share capital coincides with Vivendi management's decision to rule out a long-discussed initial public offering of UMG. The company, led by CEO Arnaud de Puyfontaine, has not established a known floor price for the entry of partners.     

The UMG label family includes the Capitol Music Group, Republic Records, Island Records, Def Jam, Interscope Geffen A&M Records, UMG Nashville and Universal Music Latin, among others.    

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UMG's revenues for the first half of 2018 amounted to €2.628 billion ($3.08 billion), up 6.8 percent at constant currency compared to the first half of 2017. The label group's recorded music sector grew its revenues by 7.4 percent, led by a 34.3 percent spike in streaming revenues — which offset equally large drops in download and physical sales, -26.5 percent and -19.1 percent respectively.    

Best sellers for the year, so far, include Post Malone, Drake and Migos, as well as the soundtrack release from Black Panther.