Vivendi to Spin off Universal Music Group, Home to Taylor Swift and Lady Gaga, in a $36 Billion IPO

By Adriaan Brits Monday, February 15, 2021

Taylor Swift

Vivendi, one of the world’s largest media companies, announced its plans to spin off its Universal Music Group (UMG) subsidiary through an initial public offering (IPO) by the end of this year.

Vivendi Stock Soars

The French media business titan Vivendi said it is considering distributing 60% of UMG’s share capital to existing shareholders. Moreover, the media company is looking to list the record label business on the Amsterdam Stock Exchange before the end of this year.

“Prior to considering a favorable response to this request, the Management Board wished to obtain a fair value for UMG to better serve the interests of its shareholders and therefore support the fulfillment of its development plan to become a global leader in content, media and communications,” the company said in a press release.

“This distribution, exclusively in kind, would take the form of an exceptional distribution (“special dividend”). The listing of the shares of UMG, a holding company currently being incorporated in the Netherlands, would be applied for on the regulated market of Euronext NV in Amsterdam, in a country which has been one of UMG’s historical homes. The transaction has received an initial favorable response from the Tencent-led consortium with whom the planned listing will be examined.”

The media business also added it is looking to establish a business valuation of at least €30 billion ($36.4 billion) for the company. Still, it says that it is “considering” a distribution of 60% of the company’s share capital to existing shareholders. The decision will be made at a shareholder meeting scheduled for March 29, the company added in a statement.

Recently, Chinese Tencent Holdings increased its stake in UMG to 20% from the previous 10% in a deal worth $3.7 billion.

“The transaction reinforces TME’s commitment to strengthening its strategic partnership with UMG. TME looks forward to an ongoing and deeper collaboration with UMG as both companies work together to bring unparalleled service and product offerings to artists and fans in China’s booming music entertainment market,” the company’s arm Tencent Music Entertainment (TME) said in a statement.

Vivendi is hoping that the stock market presence could give UMG more financial leverage to compete with its rivals Warner Music Group and Sony Music Entertainment. UMG is home to Taylor Swift, Lady Gaga, The Rolling Stones, Coldplay, and others.

Furthermore, the French media business proposed to pay €0.60 per share ($0.72) in dividends for the 2020 fiscal year. The Vivendi stock price initially soared about 24% higher in the UMG news before coming down to €30.16 ($36.59) in today’s Paris trading session.

Summary

The French media business titan Vivendi is looking to spin off its Universal Media Group in an IPO worth about €30 billion ($36.4 billion).

About the Author


Headshot of Adriaan Brits

An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.

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