Universal Music Group, which has its operational headquarters in Santa Monica, received a takeover proposal Tuesday valued at roughly $64 billion from billionaire investor Bill Ackman’s Pershing Square.
The deal would combine Universal Music Group (UMG) with Pershing Square’s acquisition vehicle in a transaction that could result in the company being listed on a U.S. stock exchange.
Universal Music Group, the world’s largest music company, represents major artists including Taylor Swift, Kendrick Lamar and Sabrina Carpenter, and operates well-known labels such as EMI and Island Records.
Sir Lucian Grainge, chairman and chief executive officer of Universal Music Group, was praised by Ackman for his leadership of the company.
“Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance,” Ackman said in a statement. “However, UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction.”
Universal Music Group has not publicly responded to the proposal.
Ackman’s firm already holds a stake in the company and has previously pushed for changes aimed at boosting its valuation, including a potential shift to a U.S. listing.
The proposed transaction would involve a mix of cash and stock and would need approval from UMG’s board, major shareholders and regulators before it could be completed.
Ackman, speaking on a conference call Tuesday, said he recently met with Grainge to discuss the proposed deal and that Grainge encouraged him to proceed, according to a Reuters report.
He also proposed adding new board members, including former talent agent Michael Ovitz as chair, along with two representatives from Pershing Square, the report said.
Major labels are facing challenges, including slower growth in music streaming and ongoing debates over royalty payments from platforms such as Spotify and Apple Music.
The industry is also contending with the rise of artificial intelligence, including concerns over AI-generated music and deepfakes that mimic established artists.