Ximalaya to Join Tencent Music in $2.4B Merger

Tencent Music Entertainment Group (TME) has announced a significant strategic merger with Chinese audio content platform Ximalaya Inc. The acquisition deal, valued at approximately $2.4 billion, is structured as a cash-and-stock transaction. Specifically, Tencent Music will pay $1.26 billion in cash and grant Class A ordinary shares that constitute no more than 5.1986% of its entire shareholding. Additionally, a further 0.37% of these shares might be allocated to Ximalaya’s founding shareholders upon completion, contingent on conditions being met. This transaction will see Ximalaya become a fully owned subsidiary of Tencent Music, subject to regulatory approvals and necessary corporate restructuring. This merger is part of Tencent Music’s broader strategy to extend its reach in the burgeoning digital audio sector, including podcasts and long-form audio, replicating the diversification strategies of global peers. This strategic move buoyed Tencent Music's share price by more than 2% in US trading, with retail investors showing increased optimism about the firm. Notably, the company's stock has already risen by over 66% this year, as of the deal's announcement.