Music giant Universal gets $64bn takeover offer

Universal Music Group Receives $64.3 Billion Takeover Proposal

Bill Ackman, the billionaire CEO of Pershing Square, has unveiled a potential $64.3 billion bid to acquire Universal Music Group. The merger, which would restructure the company’s operations, aims to see the combined entity listed on American stock markets. Universal, the global leader in music entertainment, is home to iconic artists including Taylor Swift, Sabrina Carpenter, and Kendrick Lamar, and manages major studios like Abbey Road. Its portfolio also includes renowned record labels such as EMI and Island Records.

Pershing Square, already a shareholder in Universal, holds investments in other tech giants like Google, Meta, and Amazon, as well as Restaurant Brands International, the parent company of Burger King. The company’s board has acknowledged the proposal and is currently reviewing its impact on shareholders, staff, creators, and other parties. Sir Lucian Grainge, Universal’s CEO, remains a key figure in the organization, with his leadership and strategic direction praised by Ackman as “excellent” for fostering a top-tier artist lineup and driving strong business results.

Stock Price Surge and Strategic Criticism

Universal’s share price experienced a sharp rise following the announcement of the takeover offer, initially climbing nearly 30% and later settling 10% higher. Ackman highlighted that the company’s valuation has been “languished” due to factors separate from its music business performance, which he claims could be transformed through the merger. He emphasized Universal’s redefinition of the industry, placing artists at the core while leveraging AI to capture growth opportunities and safeguard intellectual property.

“On paper, you might think it’s a money-making machine. In reality, it’s not that simple,” said Dan Coatsworth, markets head at AJ Bell. Coatsworth noted that Universal houses nine of the top ten global recording artists in 2025 but cautioned that the music streaming sector’s growth has lagged expectations. This matters because Universal’s revenue heavily depends on platforms like Spotify and Apple Music for royalty payouts.

A heated discussion continues over the compensation these platforms provide to artists. Meanwhile, the rise of AI-generated deepfakes—songs mimicking real artists—has introduced new challenges for the industry, as counterfeit content floods digital platforms. In a letter to the board, Ackman pointed out that Universal has “dramatically underperformed” relative to major US and international stock indices, citing factors such as Bolloré Group’s 18% ownership stake and the delayed New York Stock Exchange listing.

Rebuilding Trust and Addressing Challenges

Ackman has long advocated for a US public listing, which Universal currently lacks despite being listed in Amsterdam. His support for Donald Trump in July 2024 underscored his influence in the business world. The company’s recent decision to consider removing songs from TikTok, due to disputes over royalty rates and concerns about AI’s impact on creators and user safety, has drawn attention to broader issues of fair compensation in social media ecosystems.