After the market closed on Monday, Vivendi revealed that the company is planning to sell up to 50 percent of the music division of its Universal Music Group, the largest music company in the world, to one or more of their strategic partners and would soon begin hiring banks to help in identifying them.
The said unit had been rumoured to be in line for a possible listing in the stock market, as pressure intensified from the investors after Spotify, a music streaming service, went public last April. Vivendi said that it ruled this idea out because of the “complexity” of an initial public offering.
The group is based in Paris, France. It said that the transaction would possibly be launched this autumn and will be completed within the next 18 months.
Vivendi is also having discussions regarding a possible acquisition of Editis, a French publishing company, which is valued at €900 million (£802.4 million). Currently, the company is owned by a publishing firm in Spain and Latin America that is called Grupo Planeta.
The performance of the Universal Music Group was considered to be excellent over the first half of the year, as the group’s earnings before interest and tax rose by 23.5 percent to €326 million. As a whole, Vivendi, reported an adjusted net income amounting to €393 million, at an increase of 22.8 percent year-on-year. Universal is considered to be the main profit driver of Vivendi. It accounted for approximately 45 percent of its revenues last year but over 70 percent of the company’s operating income.
The recorded best music sellers of Universal during the last six months included the new releases from Drake, Post Malone, Migos and the soundtrack for Black Panther, a Marvel movie.
The said move is the first significant strategic move since Yannick Bolloré took the place of Vincent Bolloré, his father and the largest shareholder of Vivendi, as chairman last April. Earlier that same month, the elder Bolloré was placed under formal investigation after the alleged bribery of some foreign officials in Africa. He has since denied any wrongdoing.