Tencent Music Entertainment, which is already China’s biggest online music platform, is planning on getting bigger through the proposed acquisition of Lazy Audio.
Among the current owners are financial investors, the company’s management and fellow Tencent group company China Literature. New York Stock Exchange-listed Tencent Music has agreed to pay up to $415 million (RMB2.7 billion) in cash, plus post-acquisition equity awards to Lazy Audio’s management.
“Founded in 2012, Lazy Audio is a comprehensive audio platform providing entertainment in the forms of audiobooks, Chinese comedy, podcasts and other radio shows to customers. It monetizes via different channels, including pay per title, subscription payment for content, and advertising,” Tencent Music explains. “Lazy Audio has developed into a thriving community with strong user interactions and engagement, providing superior content and services to audio users across China. Lazy Audio has a highly-scalable user base, making it one of the leading audio platforms in China.” User numbers were not disclosed
“We expect this strategic acquisition to significantly deepen our presence in the fast growing long-form audio industry in China,” said Cussion Pang, CEO of Tencent Music.
Tencent Music explained in a regulatory statement that Lazy Audio “will maintain its independent operations while being an essential component of TME’s overall long-form audio strategy. Upon completion of the acquisition, TME will consolidate the investment in Lazy Audio, and enable Lazy Audio to have full access to TME’s expertise, leading technology, and strong promotional capabilities.”
Tencent Music provides online music, online karaoke and music-centric live streaming services via its QQ Music, Kugou Music, Kuwo Music and WeSing apps. Its dominance was such that Alibaba last week announced that it would close its Xiami online music operation.
In a filing, Tencent Music said that the deal is subject to regulatory approval. That is no longer a given, with Chinese regulators currently pursing an anti-monopoly agenda and punishing Alibaba and China Literature for not properly clearing their takeover deals in advance.
Tencent Music is also part of the Tencent consortium that already owns 10% of Universal Music Entertainment and is on its way to expanding that to 20%. Tencent Music also owns a $200 million stake in the much smaller Warner Music group. And, making things really interesting, Tencent Music and global music streaming leader Spotify each hold equity stakes in the other.
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