Music deal rings loud for Tencent

Business | Agencies and Tereza Cai 7 Aug 2019

Tencent (0700) has opened talks with French media group Vivendi with a view to buying up to 20 percent of Universal Music.

Such a deal would value the world's biggest music business at 30 billion euros (HK$263 billion).

Controlled by billionaire Vincent Bollore, Vivendi said that Tencent would first buy 10 percent of Universal with an option to buy another 10 percent.

Tencent has up to 12 months to decide on doubling the stake, Vivendi also revealed.

And the groups are also "considering areas of strategic commercial cooperation," Vivendi added.

Analysts noted that Tencent is teaming up with the Chinese Communist Party to develop "patriotic" video games, edging closer to a government that's increasingly intolerant of outright gambling.

In Homeland Dream, which was developed in partnership with party mouthpiece the People's Daily, players simulate building a city while alleviating poverty and executing tax breaks. Such actions are meant to echo real-life situations in the mainland.

In related action, mobile game developer IGG (0799) said games that it is preparing to launch in the second half of the year remain on track.

It added that the China-US trade war has a limited impact on the company and the games industry overall.

Other company news yesterday included Ping An Healthcare and Technology (1833) reporting that its net loss narrowed to 38.4 percent year on year to 273.54 million yuan (HK$304.1 million) for the first six months of this year.

The subsidiary of Chinese insurance giant Ping An (2318) saw a 102.4-percent growth in revenue to 2.27 billion yuan in the first half.

But the gross profit margin slumped 5.9 percentage points year on year to 21.6 percent, weighed down by declines in the consumer health care business.

No interim dividend was declared.

 

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