Paris / Amsterdam The IPO of the record label Universal Music Group (UMG) turns out to be a European hit. At the debut on the Amsterdam stock exchange, the UMG shares opened on Tuesday at 25.05 euros – an increase of around 37 percent over the reference price of 18.50 euros. The record company is now worth 46 billion euros and has the largest IPO in Europe this year.
The French media group Vivendi has thus successfully spun off its subsidiary UMG and listed it on the stock exchange. The market value of the record label with artists such as Billie Eilish, Lady Gaga and Taylor Swift was estimated at around 33.5 billion euros before the IPO.
Universal dominates the music industry together with Warner Music and Sony Music and is the parent company’s most successful line of business: UMG regularly contributes around 70 percent to Vivendi’s overall result. The separation of the record label from the group should now wash money into the coffers.
Around 60 percent of the shares go into the hands of Vivendi shareholders. Vivendi herself will ultimately hold around ten percent. Major shareholders are also the French billionaire Vincent Bolloré, US investor Bill Ackman and the Chinese technology giant Tencent.
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Ackman had initially planned to get into Universal Music through his Spac, but thus called the US Securities and Exchange Commission on the plan. Now Bolloré, who controls the record label with a stake of a good 26 percent, is restructuring Vivendi. He wants to build a group that will then focus more on media and content. The spin-off from UMG was also part of the plan.
Vivendi shareholders were therefore able to vote on a possible IPO of UMG as early as March. They were in favor with an almost 100 percent majority. Vivendi then announced in Paris that the vote at the extraordinary general meeting would allow the plan to distribute 60 percent of the UMG capital to the Vivendi shareholders to be pursued.
Six months later, these shares are now being transferred to Vivendi shareholders on the Amsterdam Stock Exchange.
Which parts remain in the group
The French group will be handsome without the record label, but no longer strong. In addition to the pay channel Canal +, the company also owns the video game specialist Gameloft and the book publisher Editis.
The divested subsidiary expects new momentum for the current year and recently forecast sales growth of more than ten percent at constant exchange rates. The operating result is expected to increase by more than 20 percent.
Like its competitors Warner and Sony Music, Universal Music is betting that the boom triggered by streaming providers such as Spotify will continue for a while. The demand for streaming services – especially during the Corona crisis, when there were no live concerts – also boosted record companies’ sales. In order to gain new listeners, Universal is already working with TikTok and YouTube.
With agency material.
More: Vivendi shareholders support possible IPO of Universal Music