There’s been a significant development in Vivendi’s moves to sell of up to 50% of Universal Music Group. This morning, UMG’s parent company announced that it has entered into ‘primary negotiations’ with Tencent Holdings to buy a 10% stake in Universal Music, with a ‘one-year call option’ to buy another 10% at the same price and terms.

What price? Well, the talks would value UMG at €30bn ($33.64bn) overall, which suggests Tencent will pay $3.36bn for the initial 10% stake, if the deal goes through. Compare that to recent guesses from various banks: in January Deutsche Bank suggested UMG was worth $33bn, while Morgan Stanley suggested it could be anywhere between $29bn and $42bn. The following month, JPMorgan mooted a $50bn price tag.

Deutsche Bank takes the prize, then, although it’s still early days for any deal with Tencent. Vivendi also stressed that it’s continuing to seek potential partners to buy an additional minority stake in UMG, but also said that any Tencent partnership will be about more than just a share-sale.

“Vivendi and Tencent are also concurrently considering areas of strategic commercial cooperation. In this context, Vivendi is keen to explore enhanced cooperation which could help UMG capture growth opportunities offered by the digitalisation and the opening of new markets,” it announced. “Together with Tencent, Vivendi hopes to improve the promotion of UMG’s artists, with whom UMG has created the greatest catalogue of recordings and songs ever, as well as identify and promote new talents in new markets. Vivendi hopes that this new strategic partnership could create value for both Tencent and UMG.”

It certainly could, although such cooperation could also create considerable sensitivities within the music industry, even if you correctly differentiate Tencent Holdings from the recently spun-off Tencent Music, which runs three music-streaming services as well as karaoke and live-video services in China. UMG boss Sir Lucian Grainge has already described the news as “an exciting development for both Vivendi and UMG” in a memo to staff this morning. “Clearly, the possibilities to accelerate and broaden our strategy are exciting…”

Universal’s major-label rivals (and the big Chinese music companies) will be parsing the implications, for, although given previous rumours of Tencent’s interest in the UMG sell-off, they already would have been. Meanwhile, other potential bidders for a stake in Universal Music – media giant Liberty Media, investment group KKR and even Apple, Spotify and Google have been mooted as potential partners in past speculation.

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