China Music Corporation and Tencent Group joint announced that they have reached an agreement to implement a digital music business merger.
According to the agreement, Tencent will integrate its QQ Music business with China Music Corporation. With asset replacement equity, Tencent will become a major shareholder of the new China Music Corporation and support the listing of the new China Music Corporation.
This music deal puts online music service growth in China even further out of reach of rivals like Apple Music, whose related services have recently suffered government-backed shutdowns in China.
Tencent will combine its QQ Music with the company's Kugou and Kuwo apps to boost the Internet giant's music market share to around 60% from 16%, according to media reports. But Tencent stated in a public report that its QQ Music, Kugou, and Kuwo products and brands will maintain independent development and existing services of users will not be impacted.
The combined entity, which will operate as a subsidiary of Tencent, will have a valuation of roughly USD6 billion, according to China Money Network.
After the merger, China Music Corporation's co-CEO Xie Zhenyu and Xie Guomin will be co-president of the new China Music Corporation; meanwhile, Tencent's vice president Peng Jiaxin will be CEO of the new China Music Corporation.