French media conglomerate Vivendi SA has begun talks with Tencent Holdings Ltd. for the sale of a 10% stake in Universal Music Group Inc.
A deal would give Universal Music a preliminary equity valuation of €30 billion for 100% of the music company, Vivendi said.
Under the preliminary talks, the Chinese company will also be given a one-year call option to acquire an additional 10% for the same price, once the transaction pushes through.
The companies are also looking at potential partnership agreements to carve growth opportunities for Universal Music. These include strategies on digitalization and the opening of new markets.
Vivendi intends to continue the sale process for an additional minority stake in Universal Music to other potential partners. According to earlier reports, Vivendi is looking to sell up to 50% of its stake in Universal Music.
Apart from Tencent, Apple Inc., Liberty Media Corp., Japan's SoftBank Group Corp. and Alibaba Group Holding Ltd. are among companies eyeing a stake in Universal Music.