Tencent Music Entertainment has acquired a stake in Warner Music Group worth $100 million, according to an SEC filing by Tencent Music on Friday. The company has acquired 4 million Class A common stock shares in WMG, according to the filing.
The deal, while amounting to a relatively small percentage of Warner’s value, which is estimated at around $16 billion, gives Tencent a stake in two of the world’s three major label groups: Late last year, Tencent closed a deal to acquire 10% of the world’s largest music company, Universal Music Group, which was recently valued at a whopping $33 billion; Tencent also has an option to purchase another 10%. However, Tencent’s stake in both UMG and Warner is non-controlling, which means it has no influence over their activities.
Reps for Warner and Tencent Music either declined or did not immediately respond to Variety‘s requests for comment.
The move took place on June 3, the day WMG debuted on Nasdaq. The news was first reported by Reuters. According to Music Business Worldwide calculations, on that day Tencent would have paid around $120 million, although sources tell Variety that a significantly larger amount may have changed hands.
The deals are doubly complex in that it was revealed in 2018 that both Warner and Sony owned stakes in Tencent valued at around $100 million; add to that, late in 2017, Tencent Music and Spotify, the world’s largest streaming platform, essentially swapped stakes worth 10% of their respective companies. Sony and Universal both hold stakes in Spotify as well, which was part of a deal
Warner, which was previously owned entirely by Len Blavatnik’s Access Industries, first announced its intention to launch an IPO in February, but shortly afterward, on March 2, delayed it when the coronavirus pandemic took effect in the U.S. and Europe. Access purchased Warner in 2011 for $3.3 billion.