Tencent-Led Consortium’s Acquisition of Additional Equity Interest in Universal Music Group

Davis Polk advised a Tencent-led consortium on the deal. Loyens & Loeff advised Vivendi.

The Tencent-led consortium has exercised its call option to acquire an additional 10% equity stake in Universal Music Group (“UMG”) from Vivendi SE (“Vivendi”) based on the same enterprise value of €30 billion for 100% of UMG’s share capital as in the initial acquisition that closed in March 2020. Such consortium includes Tencent Holdings Limited (“Tencent”), Tencent Music Entertainment Group (“Tencent Music”) and certain global financial investors. The transaction is expected to close in the first half of 2021, subject to regulatory approvals. Upon closing of the transaction, the Tencent-led consortium’s equity ownership in UMG will increase to 20%.

Tencent is a leading integrated Internet company providing value-added Internet services, including communications and social, entertainment, content, online advertising, FinTech and cloud services. Tencent Music is the leading online music entertainment platform in China, operating the country’s highly popular and innovative 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 included partners Miranda So (Picture) and Jacques Naquet-Radiguet, counsel – registered foreign lawyer Yunpeng Fan and registered foreign lawyers Jie Zhang and Shifeng Ni. Partner Nick Benham, counsel Aaron Ferner and associate Claudia Herron provided finance advice.

The Loyens & Loeff team included Wouter Kros, Antoinette van der Hauw, Stijjn Werdmölder, Dries Fransen van de Putte, Gerco van Eck, Michel van Agt, Marcel Buur, Gerjan van Eijk, Louis Lutz, Sandrine Lekkerkerker, Klaas Wiersma, Gina Hensen.

Involved fees earner: Nicholas Benham – Davis Polk & Wardwell; Yunpeng Fan – Davis Polk & Wardwell; Aaron Ferner – Davis Polk & Wardwell; Claudia Herron – Davis Polk & Wardwell; Jacques Naquet-Radiguet – Davis Polk & Wardwell; Shifeng Ni – Davis Polk & Wardwell; Miranda So – Davis Polk & Wardwell; Jie Zhang – Davis Polk & Wardwell; Marcel Buur – Loyens & Loeff; Gina Hensen – Loyens & Loeff; Wouter Kros – Loyens & Loeff; Sandrine Lekkerkerker – Loyens & Loeff; Louis Lutz – Loyens & Loeff; Michel van Agt – Loyens & Loeff; Dries Fransen van de Putte – Loyens & Loeff; Antoinette van der Hauw – Loyens & Loeff; Gerco van Eck – Loyens & Loeff; Gerjan van Eijk – Loyens & Loeff; Stijn Werdmölder – Loyens & Loeff; Klaas Wiersma – Loyens & Loeff;

Law Firms: Davis Polk & Wardwell; Loyens & Loeff;

Clients: Tencent Holdings Inc.; Vivendi SA;

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Author: Michael Patrini