This May Not End Well… Top UMG Top Suitors Are A Streaming Service and A Private Equity Firm

If history is any guide, this may not end well… The two top suitors eyeing a $20 – $25 billion bid for a 50% stake in Universal Music Group are US investment firm KKR and China’s Tencent Music Entertainment Group.

The news comes as UMG parent Vivendi interviews firms to handle the sale. 

"Sell-side banks are expected to be appointed in March, with a process likely to kick off in the second quarter, according to Reuters. "But informal discussions with potential bidders are underway as banks are trying to gauge appetite for the unit."

The conflicts and concerns flowing from other music companies if UMG became half-owned by China's top music streamer are too numerous to count. It's made even worse by the fact that Tencent Music and Spotify also have a major stake in each other, thanks to a stock swap last year. 

And the last time that a private equity firm owned a major record label was when Guy Hands' Terra Firma Capital Partners, one of the largest private equity firms in Europe at the time, took over EMI.

Hands was a former music executive and still that deal ended with EMI sold off in pieces at a fraction of its original value and Hands' firm in tatters,