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Wency Chen

Tencent Music Entertainment Group, China’s largest online music platform by user count, announced on Tuesday its acquisition of audio content platform Ximalaya for about US$2.4 billion in cash and stock.
The Tencent Holdings subsidiary will offer US$1.26 billion in cash and up to 5.2 per cent of its total outstanding class A ordinary shares. It will also issue up to 0.37 per cent of its shares to Ximalaya’s founding investors.
As part of the deal, Ximalaya will restructure certain existing businesses. The transaction is subject to regulatory approvals, including antitrust reviews.
Ximalaya confirmed the merger in a notice, pledging to maintain its brand, operational autonomy, core management team and strategic direction. The company also assured business partners that existing contracts would be honoured and user rights would be protected.

“We believe this partnership will unlock new opportunities for Ximalaya’s users, creators, employees, partners and shareholders,” the statement read.
Shares of Tencent Music in New York rose as much as 7 per cent in pre-market trading. Its Hong Kong-listed shares closed up 2.4 per cent on Tuesday before the announcement.
Founded in 2012, Ximalaya has made several unsuccessful attempts to go public. It filed for a US initial public offering in 2021 and submitted three applications to the Hong Kong stock exchange, all of which were later shelved.
According to its April 2024 prospectus to the Hong Kong exchange, the company had been profitable for five consecutive quarters through the end of 2023, reporting annual revenue of 6.16 billion yuan (US$857 million) and net income of 224 million yuan, with average monthly active users reaching 302 million.
China’s audio content sector has become increasingly competitive, with contenders including audio platforms like Sound Group, Qingting FM, streaming service NetEase Music and digital literature platforms such as China Literature and IReader Technology.
Other competitors include ByteDance’s Tomato Novel, WeChat’s reading app and podcast platform Xiaoyuzhou.
Ximalaya hosts a range of audio content, including podcasts, audiobooks, radio programmes and music.
Tencent Music posted an 8.7 per cent increase in year-on-year revenue in the first quarter to reach 7.36 billion yuan. Net profit surged to 4.39 billion yuan, although monthly active users across its QQ Music, Kugou and Kuwo platforms dipped 4 per cent to 555 million.
The company’s revenue comes from music subscriptions, advertising, artist-related merchandise, offline performances and social entertainment services such as live streaming.


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Ximalaya, a platform for podcasts, audiobooks and music, could enhance Tencent Music’s competitiveness in the audio content market


Ximalaya, a platform for podcasts, audiobooks and music, could enhance Tencent Music’s competitiveness in the audio content market.
