Tencent said to be considering partial acquisition of Universal Music Group

Tencent Music Entertainment Group (TME), which develops music streaming services for Chinese users and operates under its namesake parent company, is exploring a bid to acquire up to half of French conglomerate Vivendi’s Universal Music Group (UMG), according to sources who spoke to Reuters.

TME has an existing licensing agreement with UMG, and sees a stake as a means to strengthen the collaboration, the sources said. Vincent Bollore, who controls Vivendi by owning 25% of its shares, is apparently vetting banks for the sale. He is expected to finalise his decision in March.

Valuation of UMG, which is the world’s largest music label, varies wildly. Analysts have offered appraisals that range between 25 billion euros (US$28.44 billion) and 44 billion euros (US$50.05 billion).

Vivendi may kick off the selling process in the second quarter of this year.

According to Reuters, investment firm KKR is also exploring a bid.