Project Description

Vivendi Spin-off (Universal Music) Notes

  • Vivendi announced that it is exploring spinning off a portion of Universal Music Group in part to reduce Vivendi’s conglomerate discount.
  • Vivendi recently completed the sale of 10% of Universal to Tencent at a 30 billion euro valuation, increasing Tencent’s ownership stake to 20%.
  • Vivendi plans to retain 20% of Universal and potentially distribute the remaining 60% of the company to Vivendi shareholders.
  • Universal Music has been doing very well recently due tp surging popularity of streaming offsetting drops in publishing and advertising revenue due to the pandemic.
  • Originally, Vivendi had planned to complete the spin-off in 2023 but has accelerated those plans.
  • Universal Music is the worlds largest record label and represents many famous artists including Taylor Swift and Lady Gaga.
  • Universal will list in the Netherlands.
  • Currently, Vivendi has a 35 billion euro market cap.
  • UBS estimates it will be worth 18.4 billion euros (including its 20% stake in Universal). Vivendi shareholders will also receive their pro rate share of Universal worth ~18 billion euros (60% x 30billion euros). Thus, Vivendi appears to be trading roughly inline with its sum-of-the-parts valuation.