French media giant Vivendi said Tuesday it would sell 10 percent of its Universal Music Group subsidiary to a consortium led by the Chinese behemoth Tencent for three billion euros.
The agreement, worth around $3.36 billion, is "based on an enterprise value of 30 billion euros for 100 percent of UMG's share capital" and is expected to be finalised by mid-2020, a Vivendi statement said.
The consortium comprising Tencent Music Entertainment and "certain global financial investors" holds an option to buy an additional 10 percent of UMG "on the same price basis" by January 15, 2021, the statement added.
Vivendi said the sale would help UMG, one of the world's three biggest music companies along with Sony Music Entertainment and Warner Music Group, to develop further in Asia.
UMG is home to venerable acts including the Beatles, the Rolling Stones and Andrea Bocelli, to which it has added younger stars such as Rihanna, Justin Bieber and Ariana Grande.
Having Tencent as a strategic investor will give UMG access to a huge Chinese-based distribution network that includes the WeChat message application along with Tencent's electronic payment system and mobile telephone-based video games.
Funds will also now be available for investments in digital-based film and entertainment content.
Tencent Music, a popular online music platform, was listed on the New York stock exchange in December 2018 with Vivendi among its shareholders.
Vivendi said the agreement also aimed "to broaden the opportunities for artists and to enrich experiences for music fans, further promoting a thriving music and entertainment industry."
In early exchanges Vivendi shares showed a loss of around 0.2 percent to 25.70 euros on the Paris stock exchange, which was slightly higher overall.