7:04 am PST 2/13/2021
in
Alex Weprin
The largest music label in the world will be traded on the Euronext NV exchange in Amsterdam, provided the public offering is completed.
French media conglomerate Vivendi says it plans to split Universal Music Group into an IPO by the end of 2021.
UMG, one of the “Big Three” record labels alongside Warner Music Group and Sony Music, is headquartered in Santa Monica, California, and is led by CEO Lucian Grange.
The company announced the decision in a statement early on Saturday morning, adding that the IPO would take place on the Euronext NV exchange in Amsterdam, and that it estimates the label’s value at $ 36.4 billion.
UMG artists include Taylor Swift, Lady Gaga, The Rolling Stones, Alicia Keys, Post Malone, Billie Eilish, Billy Joel, J. Balvin and Coldplay, among many others.
In its statement on Saturday, Vivendi added that it will also distribute 60 percent of the company’s share capital to existing shareholders. Vivendi owns 80 percent of UMG, with a consortium led by China’s Tencent holding the remaining 20 percent. The Tencent consortium owned 10 percent of the label, but acquired an additional stake in December last year for $ 3.7 billion.
A special meeting will be held next month to vote on a change to the bylaws, which would allow transactions to take place. As soon as they are approved, a separate vote will be scheduled to approve the split and distribution of UMG.
Record companies are in the midst of a surprising corporate resurgence, driven by streaming music services like Spotify and Apple Music, as well as social apps like TikTok and Instagram, which license music to be used in posts by their users.
Warner Music Group, controlled by Access Industries, had its own IPO last year, raising $ 1.9 billion in a $ 15 billion valuation.