Vivendi Plans To Sell Up To 50 Percent Of UMG Within 18 Months

Vivendi, Universal Music Group’s (UMG) parent company in France, says it will begin to engage banks as it looks for strategic partner(s) in selling up to 50 percent of its stake in the music company, per its mid-year financial report issued today (July 30).

Recommendations were to have the transaction completed within the next 18 months, potentially by the fall, in order to extract the highest value as streaming continues to offset the decline in music sales.

UMG makes up a majority of Vivendi’s revenue. While Vivendi will establish a floor price for the entry of partners into UMG’s share capital, analysts have estimated the value to be worth from $20 billion to as much as $40 billion. An IPO was ruled out due to its complexity.

Recorded music revenues were reported to have grown by 7.4 percent as “subscription and streaming revenues more than offset the continued decline in both download and physical sales.” Music publishing revenues were reported to have grown by 11.1 percent, also driven by increased subscription and streaming revenues, as well as better performance revenues.

UMG is the largest of the “big three” record labels, ahead of Len Blavatnik’s Warner Music Group and Japanese-owned Sony Music Entertainment. UMG has been the only of the three to retain its bulk of shares in Spotify, estimated to be around 5 percent of the streaming service.