Vivendi opens talks with Tencent to sell Universal Music stake

Canal+ owner Vivendi has entered into preliminary talks to sell a 10% stake in Universal Music Group to China’s Tencent in a move that gives the music outfit a valuation of €30 billion.

According to Vivendi, a deal would give Tencent a one-year call option to acquire an additional 10% at the same price and under the same terms.

Vivendi said that it and the Chinese online giant are also considering other areas of strategic commercial cooperation. The media group said that it was keen to explore enhanced cooperation which could help UMG capture growth opportunities offered by the digitalization and the opening of new markets.

The possible sale of a 10% stake in Vivendi’s crown jewel comes a year after its board gave a green light to a possible “evolution” of the outfit’s shareholding structure. Vivendi said at the time that it had ruled out an IPO for the music group, but was planning the possible sale of a 50% stake in the company to one or more strategic partners.

The Tencent deal under discussion gives UMG a valuation higher than that of Vivendi itself, which is worth around €29 billion. UMG last year accounted for over €6 billion of Vivendi’s total of €13.9 billion in revenues, compared with €5.2 billion for Canal+.