China’s Tencent said to have turned to Singapore’s GIC, sovereign funds to rescue Universal Music deal

Tencent Holdings has turned to Singapore’s state investor GIC and other sovereign funds to help rescue a deal to buy a stake in Vivendi’s Universal Music after major buyout funds quit the negotiating table, sources said.

Vivendi, controlled by billionaire Vincent Bollore, had initially revealed talks with Tencent in August to sell part of Universal Music Group (UMG), the music label of artists such as Lady Gaga, the Beatles, Taylor Swift, Drake and Kendrick Lamar.

Bollore is seeking to cash in on the growing public demand for subscription and ad-based music streaming services, which have propelled UMG’s profits over the last four years.

The deal would also mark one of the biggest investments by a Chinese company into a major European media business at a time when Chinese firms have slowed down deal-making in the West.

But for the past six months Tencent has struggled to find the money to complete the transaction, raising concerns that negotiations with Vivendi could fall through, the sources said, requesting anonymity as discussions are confidential.

US private equity funds KKR and Hellman & Friedman walked away from negotiations last month, the sources said, forcing Singapore’s GIC to tap a series of sovereign wealth funds to rescue the transaction.