The Chinese firm will own a stake in the music label that distributes tunes by Lady Gaga and The Beatles.
The IFPI federation said in April that global recorded music revenues had risen 9.7 percent in 2019 from last year, while Universal was Vivendi’s main third-quarter sales growth driver, with revenues rising nearly 16 percent to 1.8 billion euros.
“Universal has been enjoying increased revenues for the last 5 years. With the company in a strong position, it can make sense to capitalise on the valuation with a minority sale at this point in the growth cycle,” said MB Capital director Marcus Bullus, commenting on the deal.
The tie-up between Tencent and Vivendi builds on a partnership struck two years ago, allowing Tencent to license Universal’s music for distribution over its streaming platforms.
The transaction should also boost morale among Chinese deal-makers, with China-outbound mergers and acquisitions (M&A) activity plunging to a 10-year low amid trade tensions between the United States and China, Refinitiv data shows.