Universal Music Group, the entertainment giant behind acts such as Taylor Swift, Sabrina Carpenter, and Kendrick Lamar, has received a takeover offer estimated to be worth $64.3 billion (£48 billion).
US investment company Pershing Square is offering to buy Universal in a merger that would see the new company listed in America, according to its billionaire chief executive Bill Ackman.
As well as representing a huge list of artists, the world's largest music company also runs Abbey Road studios and owns labels such as EMI and Island Records.
Pershing Square already owns a stake in Universal and has interests in other major companies such as Google, Meta, and Amazon, as well as Restaurant Brands International, which includes Burger King.
Universal has yet to respond to the offer.
Ackman stated that Universal's management had done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance. He emphasized that Universal has reshaped the industry to put artists at its center while demonstrating its ability to capitalize on growth opportunities from artificial intelligence, all while protecting intellectual property.
However, he expressed concerns over the company’s stock price, which had languished due to factors outside its music business, suggesting these could be addressed through the proposed transaction.
Dan Coatsworth, head of markets at AJ Bell, pointed out that while Universal may appear to be a money-making machine, its operational realities are more complicated. He noted that Universal is currently home to nine of the top 10 global recording artists of 2025, yet the growth in music streaming had been slower than anticipated, presenting challenges as the company heavily relies on platforms like Spotify and Apple Music for royalty payments.
Ackman indicated in his letter to Universal's board that the company had significantly underperformed in key US and world stock indexes, attributing this to various factors, including uncertainty about an 18% stake held by Bolloré Group, the family conglomerate owned by billionaire Vincent Bolloré. He also pointed out the impact of delaying the company's share listing on the New York Stock Exchange.
Given the current context, with Universal listed in Amsterdam, Ackman has long pushed for a U.S. flotation.
Initially, Universal’s share price soared by almost 30% following the news of the acquisition offer, eventually settling at a 10% increase by the afternoon.
As the music industry continues evolving with changing revenue models influenced by platforms like TikTok and Instagram, Coatsworth noted that competition in the music business remains severe. Record labels must invest significantly in marketing to ensure their artists stand out, compelling Universal to continuously spend to generate revenue.
