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Vivendi to possibly sell stake in Universal: Bloomberg
Posted on Wednesday, 06 February 2019 11:20
Vivendi is contemplating spinning off a portion of US-based Universal Music in a transaction that could value the music company at more than USD 25.00 billion, Bloomberg reported.
Citing people close to the matter, the news provider stated that the vendor has been involved in talks with advisors and possible suitors regarding a potential sale.
Investors rumoured to be in contention include Apple, Softbank, Tencent and Alibaba, according to one of the sources, who did not wish to be identified.
The news provider noted that a potential transaction could be part of Vivendi’s strategy to expand into Asia.
A deal is possible due to the rise in internet-based music streaming, with consumers increasingly subscribing to platforms such as Spotify, Apple Music and Tidal, Bloomberg observed.
According to Zephyr, the M&A database published by Bureau van Dijk, there were 4,123 deals targeting software publishers announced worldwide in 2018.
In the largest of these, IBM agreed to buy Red Hat for USD 34.00 billion.
Universal Music claims to be the world’s leading music company, with labels and brands worldwide including, Decca, EMI, Abbey Road Studios and Capital Music Group.
For the nine months ended 30th September 2018, it posted revenue of EUR 4.12 billion, up from EUR 3.99 billion in the corresponding period of 2017.
The potential sale comes during a profitable period for deals in the music industry, which included Spotify’s initial public offering in April 2018, which valued the company at USD 26.50 billion.
More recently, Sony bought the remaining 60.0 per cent stake it did not already own in EMI Publishing for USD 2.30 billion in November.
Lisbeth Barron, chief executive of Barron International Group, told Bloomberg: “A deal for Universal would show confidence that the recent boom in music isn’t just a short-term phenomenon.”
However, the news provider cautioned that obstacles facing the music streaming industry include piracy and musicians cutting out record labels to work directly with platforms such Spotify and Tencent.
© Zephus Ltd