Tencent Holdings Limited announced on July 8 night that the company will spin off and list its online music entertainment business, Tencent Music Entertainment Group in the United States.
Tencent Holdings, a company public in Hong Kong, submitted the proposal for the spin-off to the Stock Exchange of Hong Kong Limited yesterday. Tencent Music will be seeking an initial public offering to raise funds up to $1 billion at a valuation of about $30 billion, according to a source as reported by Bloomberg in May.
Tencent said the company will be making further announcements as they have yet to release the final terms of the proposed spin-off, including information on the offering size, price range and assured entitlement of Tencent Music securities for current shareholders of Tencent Holdings.
Tencent Music owns a 7.5 percent stake in the popular music streaming platform Spotify, while the latter owns about 9 percent of Tencent Music. The two parties agreed to swap stakes in their music business in December 2017.
Spotify debuted on the New York Stock Exchange with a direct listing in April 2018.
Tencent ranked 5th place on the 2018 Top 100 Most Valuable Global Brands published in May 2018 by WPP and Kantar Millward Brown. Followed by Facebook which sits at the 6th place, Tencent has seen its brand value grow 65 percent to $179 billion, and its ranking up three places from last year.
Tencent became the first Chinese company to reach a market capitalization of over $500 billion back in November 2017. Tencent is well-known for their messaging tools Tencent QQ and WeChat, as well as their PC and mobile games.