Tencent and Tencent Music strategic investment in Universal Music Group
Davis Polk is advising Tencent Holdings Limited (“Tencent”) and Tencent Music Entertainment Group (“Tencent Music”) on the planned acquisition by a Tencent-led consortium of a 10% equity stake in Universal Music Group (“UMG”) from its parent company, Vivendi S.A., at an enterprise value of €30 billion. The Tencent-led consortium is joined by Tencent Music and certain global financial investors. The consortium has the option to acquire up to an additional 10% equity stake in UMG at the same enterprise value until January 15, 2021. The transaction is subject to regulatory approvals and other customary closing conditions, and is expected to close by the first half of 2020.
Tencent is an internet giant which uses technology to enrich the lives of Internet users in China. Major services include communication and social platforms Weixin and QQ, targeted advertising platform, fintech and business services. Tencent was founded in Shenzhen, China, in 1998. Shares of Tencent (00700.HK) are listed on the Main Board of the Stock Exchange of Hong Kong. Tencent Music is the leading online music entertainment platform in China, operating four highly popular music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. UMG is the world’s leading music company, owning and operating a broad array of businesses engaged in recorded music, music publishing, merchandising and audiovisual content in more than 60 countries. Vivendi is an integrated content, media and communications group, operating businesses throughout the media value chain, from talent discovery to the creation, production and distribution of content.
The Davis Polk corporate team includes partners Miranda So and Jacques Naquet-Radiguet, counsel Yunpeng Fan, associate Jie Zhang and registered foreign lawyer Shifeng Ni. Partner Nick Benham and counsel Aaron Ferner are providing finance advice. Partner John B. Reynolds III is providing regulatory advice. Partner Pritesh P. Shah is providing intellectual property and technology advice. Counsel Alon Gurfinkel is providing tax advice. Counsel David Mollo-Christensen is providing executive compensation advice. Members of the Davis Polk team are based in the Beijing, Hong Kong, London, New York, Paris and Washington DC offices.