Deutsche Bank significantly boosts valuation of Universal Music

Jan. 07, 2019 11:17 AM ETFormula One Group (FWONA)SIRI, VIVEF, TCEHY, VIVHY, FWONA, TMEBy: Jason Aycock, SA News Editor3 Comments
  • Deutsche Bank has significantly raised its valuation of Vivendi's (VIVHY +1.7%) Universal Music Group, to €29B from a previous €20B.
  • That's notable since it's higher than the market capitalization of the parent company -- currently at €28.3B.
  • "With the hype around UMG stake sale having subsided, there is now scope for valuation to surprise to the upside in 2H 2019," Deutsche Bank says. The bank sees music streaming revenue growing to $21B in 2023 from $7B last year in trade dollars; it has the aggregate market growing to $25B in that same span.
  • It also sees a number of potential partners in a UMG stake sale, notably Liberty Media (NASDAQ:FWONA), which controls Sirius XM (NASDAQ:SIRI); Tencent Music (NYSE:TME) or Tencent (OTCPK:TCEHY), the latter of which has more cash to deploy for such a deal; and others including Alphabet, Facebook, Amazon, Spotify, Apple or Alibaba.

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