Tencent to Sign Deal with Singapore’s GIC
According to media reports, after the withdrawal of some major funding during negotiations, Tencent have turned to Singapore’s state-owned investor GIC and other sovereign funds to help rescue the deal for increased equity of Universal Music Group (UMG), subsidiary of French media conglomerate Vivendi. UMG is considered one of the “Big Three” music companies, along with Sony Music and Warner Music Group.
According to South China Morning Post, the deal would mark one of the biggest investments by a Chinese company into a major European media business.
In August this year, Vivendi announced that it had initiated preliminary negotiations with Tencent on the strategic investment of 10% equity in UMG. At the time, both parties valued UMG at around 30 billion euros, and Vivendi agreed that Tencent would have an option to buy a further 10% of UMG.
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Insiders believe that for the past six months, Tencent has been unable to find funding to complete the transaction, raising concerns that negotiations with Vivendi may end up in failure. US private equity funds KKR and Hellman & Friedman withdrew from negotiations last month, leaving Singapore’s GIC to contact a series of sovereign wealth funds to rescue the deal.
Insiders believe that for the past six months, Tencent has been unable to find funding to complete the transaction, raising concerns that negotiations with Vivendi may end up in failure. US private equity funds KKR and Hellman & Friedman withdrew from negotiations last month, leaving Singapore’s GIC to contact a series of sovereign wealth funds to rescue the deal.
