The music industry woke up Tuesday to its most consequential corporate news story in years: Bill Ackman’s Pershing Square Capital Management has submitted a $64 billion non-binding proposal to acquire Universal Music Group and move the world’s largest music company from the Amsterdam Stock Exchange to the New York Stock Exchange.
The implications are enormous. Universal Music Group is not just a company — it is the infrastructure of modern mainstream music. As well as representing artists such as Taylor Swift, Olivia Dean, Kendrick Lamar, and Sabrina Carpenter, UMG owns labels, a music publishing company through Universal Music Publishing Group, and studios including Abbey Road. The Weeknd, Lady Gaga, Billie Eilish, Bad Bunny, and Drake are also on the roster. When Ackman moves on UMG, the ripple effects reach every corner of the music business.
The Deal Structure
Activist investor Pershing Square said Tuesday it is planning to buy Universal Music Group in a cash and stock deal worth about 55.8 billion euros ($64.4 billion). Under the terms of the proposal, shareholders would receive a total of 9.4 billion euros in cash and 0.77 shares of new stock for each share of UMG held. That amounts to a total deal value of 30.4 euros per share, a 78% premium to UMG’s closing share price on April 2.
The proposed deal would involve Universal Music merging with Pershing Square SPARC Holdings, an acquisition company approved by the Securities and Exchange Commission in 2023. Plans would include the new company being based in Nevada and moving its stock listing from Amsterdam to the New York Stock Exchange.
UMG shares jumped 12.9% on Tuesday following the announcement. The market responded immediately to the premium on offer — though the road to completion is far from clear.
Why Ackman Says UMG Is Undervalued
Ackman’s position is that UMG’s music business is performing well, but that a set of structural problems unrelated to the art have suppressed the stock price on European markets. Pershing Square believes that UMG’s stock price underperformance is principally due to uncertainty concerning the Bolloré Group’s 18% stake in the company; the postponement of UMG’s U.S. listing; the underutilization of UMG’s balance sheet, which has led to reduced returns on equity; the absence of a publicly disclosed capital allocation plan and earnings algorithm; the lack of investor credit in UMG’s valuation for its €2.7 billion stake in Spotify; and suboptimal shareholder investor relations, communications, and engagement.
The Spotify stake is a meaningful element. The company’s Spotify stake will be sold in the market or a block transaction, with UMG artists expected to receive up to €750 million in proceeds from the sale of Spotify shares. That artist revenue-sharing component — unprecedented in a deal of this scale — signals that Ackman is aware of the cultural sensitivities involved in a takeover of this magnitude.
The Bollore Problem
Any serious analysis of this bid begins and ends with the Bolloré Group. Analyst Nicolas Marmurek of Square Global described the offer as potentially “dead from the start” without support from the Bolloré family, which engineered UMG’s 2021 spin-off from Vivendi and its Amsterdam listing. “We doubt Bolloré will accept such terms, and had Bolloré been on board he would be recommending the transaction,” Marmurek noted.
The cash component is designed to give French conglomerate Bolloré Group an exit from its 18% stake. Ackman said uncertainty over Bolloré’s holding was one reason UMG’s share price had badly underperformed since Pershing Square bought 10% of the company in 2021 at €18.27. The Bolloré family’s Vivendi SE and Bolloré SE together control a substantial portion of the UMG shareholder register, and their cooperation — or lack of it — will define whether this deal advances or collapses.
Neither UMG nor any major shareholders have commented on the proposal. French-owned Vivendi SE holds about 10% while Tencent Holdings has around 11%.
Governance and What “New UMG” Would Look Like
The proposed deal is also subject to a proposed board refresh and a new employment contract and compensation arrangement for UMG CEO Lucian Grainge. Pershing proposed that Michael Ovitz be named as UMG chairman.
Ackman notes that Ovitz and UMG’s CEO Sir Lucian Grainge have a 40-year working relationship. The proposed board composition is not incidental — it signals the kind of governance overhaul Ackman believes would accompany the NYSE relisting and help close the valuation gap he has argued exists.
New UMG will publish financial statements under U.S. GAAP and be eligible for S&P 500 and other index inclusion. That S&P 500 eligibility is the strategic centrepiece of the pitch to shareholders: institutional investors who manage index funds would be compelled to hold the stock, creating a structural demand base that Amsterdam-listed UMG has never had access to.
Ackman’s Long Game With UMG
This bid did not emerge from nowhere. Ackman has been orbiting UMG for years. UMG carried a market cap of approximately EUR €31 billion before Tuesday’s news, reflecting a share price that has fallen by around a third over the past year. Ackman argues this public valuation is deeply wrong — and that the structural issues his proposal is designed to fix are all that stand between UMG and a significant re-rating by investors.
Ackman’s move comes as UMG shares have fallen 16% in the past year, 11.9% year to date and 19.5% in the past six months. The timing of the bid — arriving weeks after UMG’s board postponed its own plans for a secondary U.S. listing — reads as a direct response to that inaction.
Pershing Square estimates that New UMG will generate approximately €2.3 billion of cash from operating cash flow and earn €1.32 per share in 2027. By the end of 2031, Pershing expects New UMG to reach €71 per share and a total value of €74 per share including dividends.
What It Means for the Music Industry
For artists, managers, producers, and publishers, the implications of a UMG ownership restructure of this scale are not abstract. Universal Music is the platform through which hundreds of the world’s most commercially significant artists release, distribute, and monetize their music. A change in listing venue, governance structure, balance sheet utilization, and capital allocation strategy will eventually touch all of those relationships.
The fact that artists could receive up to €750 million from the Spotify stake sale is the kind of headline that will generate conversation in green rooms and management offices immediately. Whether that mechanism would survive deal negotiations and ultimately reach artists remains an open question — but Ackman has put it on the table.
For the music industry as a whole, the bid raises a broader question about where major music companies are headed. The streaming era has made music catalogs some of the most valuable assets in entertainment. The question of who owns those catalogs, on which exchange they trade, and under what governance structures they operate has consequences for everyone inside the ecosystem — not just shareholders.
The transaction, if completed, is expected to close by the end of 2026. The deal would be subject to approval by UMG and SPARC’s boards of directors, a two-thirds vote by UMG shareholders, and required regulatory approvals.
This article references publicly available financial disclosures, press releases, and widely syndicated business reporting. It does not constitute financial advice.
