Tencent Music Planning On An Initial Public Offering

Reports indicate that Tencent Music, a subsidiary of Tencent Holdings, is headed for a possible Initial Public Offering. According to The Wall Street Journal the IPO is planned to take place in this year’s second half and is likely to be the biggest offering in 2018. It is expected that Tencent Music will list on an exchange in the United States.

Tencent Music operates QQ Music, a music app, among other products. Per valuations from recent private transactions the value of Tencent Music could be over $25 billion which is almost double the figure of its valuation last year following the purchase of a 9% interest in the firm by Spotify. Earlier in the month Spotify went public in an offering that was unusual since underwriters were not included and the share were sold directly.

Fourth-biggest IPO

With a valuation of close to $25 billion, the IPO of Tencent Music would be the fourth-biggest ever per Dealogic data. The market capitalization of the parent company of Tencent Music is approximately $479.8 billion with the shares having appreciated by 64.6% over the last one year.

Currently Tencent Music boasts of around 700 million users in China. The unit of Tencent Holdings was formed after the parent company acquired a majority interest in China Music Group before merging it with an already existing streaming business.

This comes in the wake of reports indicating that Tencent Holdings film unit, Tencent Pictures, has agreed to co-finance the upcoming reboot of Terminator movie. Besides co-financing Tencent Pictures will also engage in the distribution, marketing as well as merchandising in its domestic market of China.

Original programming

According to the chief executive officer of Tencent Pictures, Cheng Wu, the Chinese firm will collaborate with Skydance Media in the reboot. Earlier in the year Tencent Pictures made an investment in Skydance under a deal which will see the former finance television shows, movies as well as video game projects.

“We are thrilled Terminator will be our first collaboration with Tencent … This franchise is hugely popular with Chinese audiences and will greatly benefit from the massive reach and valuable know-how Tencent has in marketing, distribution, games and more,” the president and chief operating officer of Skydance Media, Jesse Sisgold, said.

There is intense competition among the tech giants in China to acquire and develop entertainment content in order to attract as well as retain users. At stake is a market worth billions of dollars that consists of close to 800 million users.