News June 22, 2021

Vivendi sells 10% stake in Universal Music Group to Pershing Square Tontine Holdings

Vivendi sells 10% stake in Universal Music Group to Pershing Square Tontine Holdings

In a landmark deal, Universal Music Group’s (UMG) majority owner Vivendi has reached an agreement with US-based acquisitions company (SPAC) Pershing Square Tontine Holdings (PSTH).

The agreement will see PTSH acquire 10% of outstanding ordinary shares in UMG for approximately USD $4 billion, with the transaction valuing UMG somewhere between $40 – $56 billion.

Once the deal is finalised, it’s expected that the agreement will become the biggest SPAC transaction to date, according to The Wall Street Journal.

The deal follows last month’s reports of Chinese holding company Tencent acquiring 20% of UMG through a consortium, with Vivendi also previously announcing that 60% of UMG would be spun off as a standalone entity on the Amsterdam Euronext by September.

Should the agreement be sealed, it’s expected that UMG will be owned 10% by Vivendi, 10% by PSTH, 20% by Tencent and 60% traded on the Amsterdam Euronext.

In a memo concerning the deal, UMG CEO and chairman Lucian Grainge that the company’s investors served to be “as powerful an endorsement as one could imagine.”

“This investment represents a strong validation of UMG, our strategy, our people, our legendary catalogue and our amazing roster of artists and songwriters,” Grainge remarked.

“And the fact that we now have, in addition to Vivendi, two committed investors—the consortium led by Tencent, as well as [Pershing Square Tontine] — is as powerful an endorsement as one could imagine from the investment and technology communities.”

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