Universal Music goes public and soars beyond initial valuation of $39bn


The question of how much Universal Music Group is worth has been a hot topic in recent years. Escalating estimates from Goldman Sachs, for example, which valued UMG at $23.3bn in 2017, rising to $53bn in April 2021.

Or, more conservatively, with the €30bn (around $36.4bn at the time) valuation of UMG when a consortium led by Tencent upped its stake in the major label to 20% early this year.

From today, we’ll have an official – if changeable according to the whims of the market – valuation of the company, as it goes public on the Euronext Amsterdam exchange. The spin-off from parent company Vivendi has been a long time coming – not to mention buffeted by a global pandemic, and a late attempt at a SPAC-based investment that fell foul of regulators.

Still, it’s public listing day for UMG, and the reference price is €18.50 per share, which means an initial valuation of €33.5bn (just over $39bn) for the company. First day trading being what it is, we could see a few lumps and bumps for the share price before it settles down.

At the time of writing, the price has soared to €25.25, and thus a valuation of €46.3bn (around $54.3bn, which makes that latest Goldman Sachs figure look on the money for now).

The bigger picture here is partly one of investors’ bullishness about the music industry and music rights – a trend that extends past trading in public companies to include the continued frenzy of catalogue buyouts.

Also, with a growing number of the industry’s biggest players now public, and thus sharing more detailed figures on their businesses every quarter, we’ll have more insight into the mechanics of the streaming-era industry. Something that will influence the ups and downs of these companies’ share prices, but also the ongoing debate about how the streaming pie is shared out.

Written by: Stuart Dredge