Tencent takes 10% stake in Universal Music to boost presence in the record industry

Tencent also added that it is working on a separate deal to allow its streaming business to buy a minority stake in UMG China.

The Chinese tech giant is leading a consortium to invest in the Vivendi-owned company as it seeks to continue to dominate the Chinese market which has seen consumers quickly adapting to streaming and showing a willingness to pay.

It also hopes this deal will help Tencent counter the rise of competitor TikTok globally, which was credited for helping Lil Nas X’s country rap single "Old Town Road” achieved viral popularity.

According to The Wall Street Journal, the stake sale allows the Vivendi to cash in on a music industry revived by Spotify and Apple Music, and enables UMG to accelerate its development in Asia.

Tencent also added that it is working on a separate deal to allow its streaming business to buy a minority stake in UMG’s Chinese operations.

UMG recently partnered with AirAsia to form a new label signing, developing and breaking new Asian artists.

The label, called RedRecords, ultimately wants to elevate Asian pop (A-pop) throughout the region and globally by focusing on discovering and developing talent from South East Asia and throughout the wider continent to form a clear and unique sound that reflects the diverse and rich musical culture of the continent.