Tencent Poised to Build up Common Tune Team Stake to twenty%

French media conglomerate Vivendi stated on Friday {that a} consortium led through China’s Tencent will workout its approach to gain an additional 10% stake in Common Tune Team, elevating the consortium’s protecting to twenty%.

A Tencent-led consortium finished its deal to shop for 10% of UMG in March this yr. It retained an possibility working till January 2021 to double its stake, thru a 2nd acquire at the identical valuation. The Tencent offers put a ground valuation of EUR30 billion ($36.9 billion) on UMG.

In a press commentary the French corporate stated: “Vivendi has loved the presence of Tencent and its co-investors at UMG’s percentage capital since March and is more than happy the Consortium has determined to workout its possibility. They’re going to permit UMG to additional expand its actions in Asia.”

Vivendi says it plans to promote different minority stakes in UMG and to pursue an IPO of the unit through 2022 at the most recent. “The money generated through those transactions could also be utilized by Vivendi to cut back its monetary debt and to finance percentage buybacks and acquisitions,” it added.

In a next regulatory submitting, Tencent additionally showed the transfer.

“The consortium incorporates the similar participants as that for the preliminary 10% funding in UMG, together with Tencent Tune Leisure Team and different monetary co-investors,” Tencent stated. “The transaction is anticipated to near within the first part of 2021.”

The March deal used to be complemented through a separate settlement, permitting Tencent Tune to obtain a minority stake within the UMG subsidiary proudly owning its Better China operations.

Regulatory popularity of the most recent deal would in most cases be a formality for the reason that it represents a stake build up, no longer a brand new acquisition, and that regulators would were conscious about the choice on the time they green-lighted the March deal.

Alternatively, the actions of tech firms have this yr change into a part of the Chilly Struggle narrative between the U.S. underneath President Donald Trump and hardline Chinese language chief Xi Jinping. The U.S. has sought to rein in Chinese language {hardware} providers Huawei and GTE and repair firms together with Bytedance’s TikTok and Tencent’s WeChat.

Additionally, in contemporary months festival and era regulators around the planet have taken a miles tougher line on world tech giants. In China, the federal government has lately begun to make use of its State Management of Marketplace Legislation to restrict the facility and affect of its personal web giants for the primary time. Prior to now few years, China has extensively utilized foreign exchange controls to rein in huge out of the country purchases through Chinese language corporations.

And handiest remaining week, the similar State Management of Marketplace Legislation fined a trio of Chinese language firms, together with a unique Tencent offshoot, for no longer in quest of its prior permission prior to deal-making.

That drive, on the other hand, could also be counterbalanced through Beijing’s need to look Chinese language firms wield cultural and media affect around the world in identical model to U.S. media conglomerates.

Tencent, which already owns important stakes in most of the global’s main video games firms, has 9.1% of song streaming chief Spotify, and boasts over 1000000000 customers for its WeChat tremendous app, is definitely situated to tackle that mantle as China’s global tech champion.