Tencent Music to Acquire Chinese Audio Platform Ximalaya

Tencent Music Entertainment (TME), China’s largest operator of music streaming services, has announced its intention to acquire Chinese audio platform Ximalaya.

The main players:

• Ximalaya hosts podcasts, audiobooks, lessons and radio stations, amongst other offerings.

• As per Digital Music News, in 2023 Ximalaya reported more than 300 million monthly active users.

• Tencent Music operates streaming platforms such as QQ Music, Kugou Music and Kuwo Music, as well as social entertainment platform WeSing.

The details:

• Under the acquisition, Ximalaya will become a wholly-owned subsidiary of TME.

• Music Business Worldwide quotes Reuters as reporting the deal is worth about $2.4 billion in cash and stock.

• Ximalaya shareholders will receive $1.26 billion in cash plus TME shares “representing approximately 5.2% of the company’s total outstanding shares.”

• Founder shareholders will “receive TME shares worth up to 0.37% of the company’s total share count.” They will be distributed in tranches once the deal closes.

• The deal is yet to receive regulatory approval.

The whys:

• The acquisition will enable TME to expand into the spoken word content market, potentially positioning it as a competitor to Spotify, which has also invested heavily in this area.