Tencent to Merge Music Unit With Rival to Create Streaming Giantby
QQ Music and owner of Kugou to form a new, larger company
Tencent to hold a majority stake in the newly formed entity
Tencent Holdings Ltd. will merge its QQ Music unit with China Music Corp., combining some of the country’s most popular Spotify-like services to enrich its online-streaming business.
Asia’s largest internet company will hold a majority stake in the newly formed entity, which plans an initial public offering at some point, the company said in an e-mailed statement on Friday. It didn’t disclose financial details or valuations.
Upon merging, the new company will run services including QQ Music, Kugou and Kuwo, all of which will continue to operate as independent units and brands. The company will adopt a freemium model for all services, where users can pay for a more premium experience.
Xie Guomin and Xie Zhenyu, co-chief executive officers of China Music Corp., will become co-presidents of the new company. Tencent Vice President Pang Kar Shun will become CEO.
The Wall Street Journal had reported this week that Tencent was buying control of China Music Corp., via a deal that valued the target company at $2.7 billion.