Universal Music Group valued at $22bn – three times what it was worth in 2013

The value of Universal Music Group has trebled in the past four years to approximately €20bn ($22bn).

That’s according to top brass at UMG parent Vivendi, speaking at its annual shareholders’ meeting today (April 25) in Paris.

General Counsel Frédéric Crépin, who sits on Vivendi’s management board, discussed previous valuations of UMG at the event, which took place at L’Olympia this morning.

He revealed that UMG had been the subject of two takeover attempts in the past half-decade – both rejected by Vivendi.

The first came in March 2013, when it received an indicative bid of €6.5bn.

Crépin stopped short at confirming who made this approach, but Japanese telco giant Softbank is rumored to have offered to buy UMG in 2013 before being spurned by Vivendi.

Reports at the time suggested Softbank tapped out after making a US $8.5bn offer.

According to Crépin, another would-be acquirer made a beeline for UMG in 2015 – this time with an expression of interest of €13.5bn ($15bn).

Again, this was rejected by Vivendi – around the same time that activist investor P. Schoenfeld Asset Management LP was calling for the French company to spin off UMG.

“We don’t have a crystal ball, but one thing is clear: music companies need to seize the initiative; drive further transformation; align business model innovation with technology innovation; and continue to expand the ways our artists can engage with their fans.”

Michael Nash, UMG

Interestingly, Vivendi Chairman (and 20%+ shareholder) Vincent Bolloré told shareholders today that certain investment banks now value UMG at €20bn ($22bn).

The last public valuation UMG received from a bank was in 2014, when Credit Suisse judged it to be worth €10bn.

These figures would suggest that UMG’s valuation has effectively trebled under the leadership of Sir Lucian Grainge (pictured).

Grainge was appointed CEO of UMG in 2010 and then promoted to Chairman & CEO in 2011.

In his first year as Chairman, he executed the £1.2bn ($1.9bn) acquisition of ‘the fourth major’, EMI Music.

The deal was approved in 2012, but UMG was forced by EC regulators to sell Parlophone (including copyrights by the likes of David Bowie, Pink Floyd and Coldplay) – which was acquired by Warner Music Group in 2013.

(To give you further sense of the power of UMG’s $22bn valuation; its rival Warner Music Group was acquired by Len Blavatnik’s Access Industries for $3.3bn in 2011 – a deal which now looks very much like a snip.)

Today’s revelations regarding UMG’s valuation arrive as the IFPI reveals that global recorded music industry revenues increased 5.9% in 2016, up to $15.7bn.

Speaking to an audience in London earlier today, UMG’s EVP of Digital Strategy, Michael Nash, hailed the recovery of the record business – but warned that Universal must continue to be “unrelenting in our efforts to develop and embrace transformational opportunities”.

He said: “We don’t have a crystal ball, but one thing is clear: music companies need to seize the initiative; drive further transformation; align business model innovation with technology innovation; and continue to expand the ways our artists can engage with their fans.”

Earlier this month, Universal became the first major music company to ink a new long-term licensing deal with global streaming market leader Spotify.

The major won the right to window new album releases on the service’s premium tier for fortnightly spells, in addition to ‘unprecedented access to data’.

As reported by MBW earlier this year, Universal Music Group posted all-time record revenues under Vivendi ownership of €5.267bn ($5.8bn) in 2016 – largely thanks to a 55.5% rise in streaming revenues.

UMG overtook Canal + to become Vivendi’s biggest-earning subsidiary in the year.Music Business Worldwide