Following the announcement made on August 6th, the agreement between Vivendi and a consortium led by Tencent for the planned acquisition of a stake in UMG by the Consortium has been signed. This agreement provides for the purchase by the consortium, led by Tencent with the participation of Tencent Music Entertainment and certain global financial investors, of 10 per cent of the share capital of UMG, based on an enterprise value of €30 billion for 100 per cent of UMG’s share capital.
The consortium has the option to acquire, on the same price basis, an additional amount of up to 10 per cent of UMG’s share capital until January 15th 2021.
This agreement will be shortly complemented by a second agreement allowing Tencent Music Entertainment to acquire a minority share capital of UMG’s subsidiary that houses its operations in Greater China.
This transaction will be submitted to the competent regulatory authorities. The closing of the transaction is expected by the end of the first half 2020.
In a statement, Vivendi said “it is very happy with the arrival of Tencent and its co-investors. They will enable UMG to further develop in the Asian market.”
Tencent and the consortium members said “they are excited to support UMG’s growth through this investment. Together with Vivendi, Tencent and Tencent Music Entertainment will work to broaden the opportunities for artists and to enrich experiences for music fans, further promoting a thriving music and entertainment industry”.
In addition, the Vivendi Supervisory Board was informed on December 23rd, that negotiations were beginning concerning the potential sale of an additional minority share for a price which would at least be identical.
Eight banks have been mandated by Vivendi to achieve its plans.