Tencent Holding/ADR (OTC: TCEHY) is buying a stake in the world's largest music company, the company behind recording artists Ariana Grande and Billie Eilish, among others.
The Chinese tech and entertainment conglomerate said it is buying a 10% stake in Universal Music Group from Vivendi SA (OTC: VIVHY) for $3.36 billion with a one-year call option to buy another 10%.
The deal, in the works for months, would give Tencent bigger exposure to the global music industry.
"Together with Vivendi, Tencent and Tencent Music Entertainment will work to broaden the opportunities for artists and to enrich experiences for music fans, further promoting a thriving music and entertainment industry," Tencent said in a statement.
Los Angeles-based Universal is the largest of the major music companies, with nearly 40% of the market share on the recording production side.
Tencent also operates China's largest music streaming service.
UMG, in addition to being the label behind current chart toppers like Grande, Eilish, Drake, and Taylor Swift, also holds the rights to the music of Queen, including "Bohemian Rhapsody," the most-streamed song from the pre-streaming era, and the Beatles' catalog.
Tencent stock was down on Tuesday, off 1.5%, trading at $47.89.