Swedish music streaming service Spotify AB and Chinese Internet company Tencent Holdings Ltd (騰訊) have struck a deal to take minority stakes in each other.
The companies on Friday said in a joint statement that they would acquire new shares representing minority equity stakes in each other for cash.
Tencent Music Entertainment Group (騰訊音樂娛樂) is to invest in Spotify, while the Swedish music start-up is to take a stake in Tencent’s music wing.
Terms of the deal were not disclosed.
‘VIBRANT ECOSYSTEM’
The companies said it would be “strengthening relationships between the two most popular music streaming platforms in the world.”
Spotify CEO Daniel Ek said it “will allow both companies to benefit from the global growth of music streaming.”
Tencent Music Entertainment CEO Cussion Pang (彭迦信) said the companies would look to collaborate and “foster a vibrant music ecosystem that benefits users, artists and content owners.”
GROWING USER BASE
Shenzhen, China-based Tencent is one of China’s most powerful Internet companies, running the WeChat (微信) messaging app, as well as online payment platforms and games.
As Chinese authorities have largely shut out Western companies like Google, Twitter Inc and Facebook Inc, homegrown Internet companies like Tencent have been able to grow rapidly in size.
Spotify has no users in China. As of July, the company had more than 60 million subscribers worldwide and 140 million active users who can access more 30 million songs.
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