MUMBAI: Tencent Music Entertainment Group announced on Tuesday that it will acquire Chinese long-form audio platform Ximalaya in a landmark deal valued at approximately $2.4 billion in cash and stock. The move is aimed at enhancing Tencent Music’s content library and attracting a larger base of paying subscribers.
The acquisition grants Tencent Music access to Ximalaya’s expansive creator ecosystem, which includes both professional and user-generated content across categories such as history, business, and entertainment.
This deal marks one of the few significant mergers in China’s tech sector in recent years. A sweeping regulatory crackdown on private enterprises, which began in late 2021, had largely frozen major dealmaking activities. However, with Beijing now encouraging private-sector expansion amid economic headwinds and ongoing tensions with the U.S., this transaction signals renewed momentum in corporate growth strategies.
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Tencent Music has increasingly invested in long-form content—including podcasts and audiobooks—to enhance its Super VIP program. This premium offering bundles high-quality audio experiences with online karaoke features and exclusive access to events.
Despite the ambitious move, analysts urge caution. Charlie Chai of 86Research noted that Tencent’s previous $417 million acquisition of Lazy Audio in 2021 underperformed, and similar integration challenges could hinder the Ximalaya merger. “Organizational friction may limit synergy realization in the near term, keeping Ximalaya largely independent,” Chai said.
The deal follows Tencent Music’s recent strong earnings report, which exceeded market expectations, largely due to a rise in subscribers for its long-form audio offerings.
Under the terms, Tencent Music will pay $1.26 billion in cash and issue Class A shares representing up to 5.20% of its total outstanding stock. Additionally, it will issue further shares—no more than 0.37% of total stock—to Ximalaya’s founding investors. The stock component is valued at approximately $1.15 billion, based on Tencent’s closing price as of April 24, the day before reports of the deal surfaced.
