Tencent Music Entertainment, China’s fast-growing streaming platform, announced on Tuesday (June 10) it plans to acquire Ximalaya, a Shanghai-based service for streaming podcasts and audiobooks. Under a merger agreement signed today, Ximalaya will become a wholly owned subsidiary of TME, subject to regulatory approvals and closing conditions.
According to filings with the SEC and the Hong Kong Stock Exchange, Tencent Music will acquire Ximalaya in a deal valued at over $2.4 billion. The transaction includes $1.26 billion in cash, along with Class A shares representing up to 5.20% of Tencent Music’s total outstanding shares. An additional 0.37% in shares will be issued to Ximalaya’s founding investors. Based on Tencent Music’s closing price on April 24 — prior to a Bloomberg report on the pending acquisition — the equity portion is estimated to be worth around $1.15 billion.
With the proposed acquisition, Tencent Music is looking to cement its status as a full-spectrum audio leader, expanding beyond music streaming. Its merger with Ximalaya, which claimed roughly 303 million monthly active users in 2023, according to reports, enhances Tencent’s portfolio by adding depth in podcasts and audiobooks. The move also positions Tencent more competitively in a global audio environment where Spotify and Amazon continue to scale their investments in non-music content.
TME is coming off a strong first quarter, announcing last month that a 17%-surge in music subscription revenue drove higher first quarter revenue for TME to $581 million, fueling an 8.7% rise in total revenue to $1.01 billion. The platform’s subscriber base grew to 122.9 million, marking an 8.3% increase from the same period last year. Meanwhile, average revenue per user (ARPU) climbed from $1.47 to $1.57.
The company, which is led by CEO Cussion Pang, operates three major streaming platforms — Kugou Music, QQ Music, and Kuwo Music — alongside its popular karaoke app, WeSing. In recent years, the company has seen a strategic shift, with its core business increasingly centered on music streaming, while its social entertainment segment has declined.