Vivendi has confirmed talks with Chinese internet giant Tencent over a potential sale of 10% of the French media conglomerate’s stake in Universal Music Group.

The proposed €3bn (£2.8bn/$3.4bn) deal would value the record label at €30bn, with Tencent retaining an option to double its shareholding on the same terms within 12 months.

However, it remains to be seen whether current hostilities directed by the US political establishment towards Chinese investors regarding high-profile strategic assets could complicate the deal.

Vivendi said in a statement that Tencent would help the company to advance the promotion of UMG’s artists in China.

The French media giant and Tencent are also considering areas of strategic commercial cooperation.

Vivendi added: “Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever, as well as identify and promote new talents in new markets.”

It has previously been suggested that Vivendi would consider offloading as much as 50% of UMG.

Tencent already has a significant interest in music services, including investments in India-facing Gaana, pan-Asian service Joox and singing application Smule.

UMG accounted for 67% of Vivendi’s overall earnings in the first half of 2019, with the record label’s revenue rising by 18% to €3.3bn.

Sales at Vivendi Village, which includes See Tickets and Digitick, edged up by 0.4% to €23m, while organic growth of 16.4% was posted.

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