In brief
Investment firm Pershing Square has made a $64 billion offer to acquire Universal Music Group, the powerhouse behind numerous chart-topping artists such as Taylor Swift and Kendrick Lamar. This potential merger could see Universal listed in the US stock market, highlighting a clash with its current Amsterdam listing. Bill Ackman, CEO of Pershing Square, believes the acquisition could revitalize Universal's stock performance, which has been sluggish despite strong business metrics.
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, its billionaire chief executive Bill Ackman said.
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, which already owns a stake in Universal, also has holdings in Google, Meta, Amazon, and Restaurant Brands International, which includes Burger King.
Universal is yet to respond to the offer.
Ackman stated that its management had done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance.
He mentioned that Universal had reshaped the industry to focus on artists and had shown it could seize growth opportunities from artificial intelligence while protecting intellectual property.
However, he noted that the company's stock price had languished due to issues unrelated to the performance of its music business, which could all be addressed with this transaction.
Dan Coatsworth, head of markets at AJ Bell, commented, On paper, you might think it is a money-making machine. In reality, it's not that simple.
Universal is home to nine of the top 10 global recording artists of 2025, said Coatsworth, but growth in the music streaming market has been slower than expected, critical as Universal relies heavily on platforms like Spotify and Apple Music for royalty payments.
Ackman expressed that Universal had dramatically underperformed in several US and global stock indexes, attributing this to various factors including uncertainty related to an 18% stake in Universal owned by Bolloré Group and a recent decision to delay their listing on the New York Stock Exchange.
Currently listed in Amsterdam, Ackman has campaigned for Universal to float in the US.
After the takeover offer emerged, Universal's share price initially soared by nearly 30%, marking a day's gain of 10%.
The music industry landscape has changed with listeners shifting towards platforms like TikTok and Instagram. Universal previously had a dispute with TikTok over royalties, which has now settled, highlighting broader concerns about getting compensated by social media networks.
Coatsworth added that competition in the music business necessitates record labels to invest significantly in marketing to ensure their artists stand out, meaning Universal must continue spending money to drive profits.
