Vivendi in talks to sell 10% stake in Universal Music to China's Tencent

Vivendi has entered into preliminary discussions about the sale of a 10% stake in the Universal Music Group (UMG) to Chinese technology company Tencent.

The French media group said on Tuesday that the deal would give UMG a preliminary equity valuation of €30bn. Tencent would also have a one-year call option to buy an additional 10% of UMG at the same price and terms.

In addition, Vivendi said both companies are considering areas of strategic commercial cooperation.

"In this context, Vivendi is keen to explore enhanced cooperation which could help UMG capture growth opportunities offered by the digitalisation and the opening of new markets," it said.

"Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever, as well as identify and promote new talents in new markets. Vivendi hopes that this new strategic partnership could create value for both Tencent and UMG."

Vivendi said it also plans to continue the process for the sale of an additional minority stake in UMG to other potential partners.