Music giant Universal gets $64bn takeover offer

Universal Music Group Receives $64.3 Billion Takeover Bid

Universal Music Group, the entertainment behemoth that manages artists like Taylor Swift, Sabrina Carpenter, and Kendrick Lamar, has been approached by a $64.3 billion takeover proposal. The deal, spearheaded by US investment firm Pershing Square, would merge the company with a new entity listed on the American stock market, according to CEO Bill Ackman. This potential transaction follows Pershing Square’s existing ownership stake in Universal, which also includes investments in Google, Meta, Amazon, and Restaurant Brands International.

Universal, which operates Abbey Road Studios and oversees labels such as EMI and Island Records, has acknowledged the bid and plans to evaluate its impact on shareholders, employees, and stakeholders. The board has reaffirmed its support for Sir Lucian Grainge, Universal’s CEO, and his strategic direction. Ackman praised the management team’s efforts in cultivating a top-tier roster of artists and adapting to evolving industry trends, including AI-driven opportunities.

“On paper, you might think it’s a money-making machine. In reality, it’s not that simple,” remarked Dan Coatsworth, markets head at AJ Bell. While Universal boasts nine of the top 10 global recording artists from 2025, Coatsworth highlighted challenges in the streaming market, where growth has fallen short of expectations. This matters because Universal’s revenue heavily depends on platforms like Spotify and Apple Music for royalty payouts.

Ackman argued that Universal’s stock has underperformed in key US and global indices, attributing this to factors such as the Bolloré Group’s 18% stake and a recent delay in listing shares on the New York Stock Exchange. The company is currently based in Amsterdam, but Ackman has long advocated for a US listing, which he believes could unlock greater value. His support for Donald Trump in July 2024 underscored his influence in shaping business and political strategies.

Universal’s share price initially surged by nearly 30% after the offer was announced. By the afternoon, it had climbed to 10% higher. The shift in music revenue models, driven by platforms like TikTok and Instagram, has reshaped the industry. In 2024, Universal threatened to remove its songs from TikTok, citing concerns over fair compensation and the effects of AI on artistic integrity. Coatsworth noted that this dispute, now resolved, reflects deeper issues with social media’s payment practices.

Meanwhile, the industry grapples with the rise of deepfake songs—AI-generated tracks mimicking real artists—complicating royalty tracking. Ackman emphasized that these challenges, alongside intense competition, require ongoing investment in marketing to maintain Universal’s market position. “Record labels must pour substantial resources into promoting artists, which means Universal is constantly spending to generate returns,” Coatsworth added.