Tencent buys a stake in Universal Music

IT WAS A nice example of nominative determinism. On December 31st a consortium led by Tencent, a giant Chinese digital conglomerate, announced it was buying 10% of Universal Music Group, a subsidiary of Vivendi, a French company, for €3bn ($3.4bn). The deal, first mooted in August, gives Tencent a stake in a firm whose catalogue spans artists from ABBA and Bob Marley to Jay-Z and Taylor Swift.

Tencent’s purchase values Universal at around €30bn. That is remarkable, for two reasons. The first is that Vivendi’s total market capitalisation is just €31.5bn. But Universal is merely the largest component of a conglomerate that also includes Canal+, a French pay-TV channel, and Havas, a PR-and-advertising firm. Both bring in profits of hundreds of millions of euros, and Vivendi is only lightly indebted.

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