×

Vivendi to Sell Up to Half of Universal Music Group

Vivendi is planning to sell up to 50% of Universal Music Group, the company said Monday.

The French media giant said it would sell half of UMG, whose artists include Lady Gaga and Drake, to “one or more strategic partners, in order to extract the highest value” from the subsidiary. “An IPO was ruled out due to its complexity,” Vivendi said in a statement accompanying the release of its half-yearly results.

Last August, Goldman Sachs valued UMG at $23.5 billion (roughly three times what it was worth in 2013), ahead of Sony Music, which it valued around $20.1 billion. UMG and Sony are the music industry’s two largest major label groups.

UMG has been bolstering Vivendi’s financial results for the last several years. During the first half of 2018, UMG’s income from operations, which rose by 23.5% to reach €355 million, accounted for nearly 70% of all of Vivendi’s income. UMG’s revenues were up 6.8% to €2.6 billion, and streaming revenues also skyrocketed by 34.3% during the first half of 2018.

UMG’s sale process will likely start this fall and could be completed within the next 18 months. Vivendi will be working with banks to help identify strategic partners and will set up a “floor price for the entry of partners into UMG’s share capital,” the company said in its statement.

Earlier this year, Vivendi was preparing to potentially list UMG on the stock market, according to the Financial Times and Reuters, which quoted Vivendi CEO Arnaud de Puyfontaine as saying that the company had started examining “the benefits of a potential listing of UMG to the supervisory board.”

Vivendi has rejected previous bids to buy UMG, notably one from Japanese phone carrier SoftBank for a reported $8.5 billion, in 2013.

Vivendi is now under the chairmanship of Yannick Bollore, the son of former chairman Vincent Bollore. On Monday, the company reported half-yearly revenues of €6.46 billion, a year-on-year increase of 18.3%, from 2017, which includes the the consolidation of advertising unit Havas since last July. Aside from that, the revenue increase was boosted by the growth of UMG and Canal Plus Group .

Vivendi also realized a capital gain of €1.2 billion on the sale in March of its 27% stake in video game maker Ubisoft. But the company revealed a €512 million writedown on its shares in Telecom Italia. Vivendi is Telecom Italia’s single largest shareholder, with a 24% stake, but it lost control of the telco’s board in May after a bitter fight with a U.S. hedge fund. The writedown takes into the account “the execution risks” associated with the new board’s strategy.

Still, the Ubisoft sale, plus a sale of half of UMG, would bestow a significant windfall on Vivendi, although it remains to be seen how the company intends to make use of it.

More Music

  • Wendy Goodman

    Promotion Executive Wendy Goodman Exits RCA Records

    Wendy Goodman, a 20-year veteran of RCA Records (and formerly imprint J Records), is leaving the company. Currently senior vice president of promotion for the Sony Music label, her last day is Feb. 28. In an email to staff, RCA co-president Joe Riccitelli praised Goodman’s “passion, positivity and tenacity” in helping break multiple hits at [...]

  • Ashley McBryde Country Radio Seminar, Day

    A Country Music Conference Dares Wonder: Could 2020 Be 'the Year of the Woman'?

    Taking his seat for a panel on the subject of women in country music at Country Radio Seminar last week, one of the speakers, Damon Moberly, VP of promotion at the Mercury Nashville label, made a quip about what a minefield the topic has been. “Doing the female panel. What could go wrong?” Moberly asked, [...]

  • Jamie Foxx - Excellence in the

    Jamie Foxx Honored by Leonardo DiCaprio at American Black Film Festival Honors

    Leonardo DiCaprio and Morgan Freeman made surprise appearances at the American Black Film Festival Honors ceremony on Sunday night. The “Once Upon a Time in Hollywood” actor presented Jamie Foxx with the excellence in the arts award while Freeman announced the movie of the year, which went to “Just Mercy.” Hosted by comedian Deon Cole, [...]

  • ALTERNATIVE CROPMandatory Credit: Photo by ETIENNE

    Watch the Kobe Bryant Memorial Live 

    Kobe Bryant, his daughter Gianna and the seven other people killed in last month’s helicopter crash will be honored Monday in a public memorial at Staples Center. The ceremony, called “A Celebration of Life,” will begin at 10 a.m. PT/1 p.m. ET.  Over 20,000 people are expected to attend the ceremony.  You can stream the [...]

  • Bob Cobert Dead: 'Dark Shadows' Composer

    Bob Cobert, 'Dark Shadows' and 'Winds of War' Composer, Dies at 95

    Bob Cobert, the Grammy- and Emmy-nominated composer of television’s “Dark Shadows” and “The Winds of War,” died of pneumonia Feb. 19, in Palm Desert, Calif. He was 95. Cobert’s themes for the 1960s Gothic horror soap “Dark Shadows” – “great spook music,” he once called it – were his most popular compositions, and “Quentin’s Theme” [...]

  • Kraftwerk Reveal North American Dates for

    Kraftwerk Reveal North American Dates for 50th Anniversary Tour

    After their worldwide 3-D concert tours, electronic music pioneers Kraftwerk have announced 50th anniversary North American tour dates for summer 2020, also in 3-D. The group was founded in 1970 by Ralf Hütter and Florian Schneider, along with their now-legendary Kling Klang Studio in Düsseldorf, Germany, where they conceived and produced all Kraftwerk albums. Their [...]

More From Our Brands

Access exclusive content