Tencent Music to Acquire Ximalaya for $12.6B, Shares Surge

Tencent Music Entertainment Group has announced its plans to acquire Ximalaya Inc., a prominent online audio platform, for a total consideration of $12.6 billion in cash. The acquisition, which is subject to the fulfillment of certain closing conditions, includes the issuance of Tencent Music's Class A ordinary shares, with the total number not exceeding 5.1986% of the total issued and outstanding shares. Additionally, the founders of Ximalaya will receive a portion of Tencent Music's Class A ordinary shares, not exceeding 0.37% of the total issued and outstanding shares, upon and after the closing of the transaction. The acquisition also involves the reorganization of certain existing businesses related to the transaction.

This strategic move by Tencent Music signifies a significant expansion into the online audio sector, complementing its core music business. The acquisition is expected to enable Tencent Music to diversify its offerings and strengthen its position in the broader online audio market. The deal underscores Tencent Music's commitment to enhancing its content ecosystem and providing users with a more comprehensive audio experience.

The announcement of the acquisition has had a notable impact on the market, with Tencent Music's shares experiencing a significant surge in pre-market trading. This positive market reaction reflects investor confidence in the strategic value of the acquisition and its potential to drive future growth for Tencent Music. The transaction is expected to close subject to the satisfaction of customary closing conditions and regulatory approvals.