Universal Music Just Got a $64 Billion Takeover Offer. The Music Industry’s Consolidation Era Is Accelerating

The stock of Universal Music Group surged thirteen percent on a Tuesday morning somewhere in Amsterdam, in the glass-and-steel calm of a financial district that has never quite felt like the right home for a company that owns Abbey Road. It was the kind of figure that causes traders to glance away from their screens. The reason: a dinner, a letter, and a $64 billion offer from one of the most dramatic investors on the planet.

For almost five years, Bill Ackman has been involved with Universal Music Group. Before it could really take off, his first attempt in 2021 fell apart due to regulatory scrutiny. Instead of leaving completely, Pershing Square discreetly grew to be one of UMG’s biggest investors, and Ackman joined the board. He waited while sitting and observing. He departed the board last year.

Then, a few weeks prior to the release of this most recent proposal, he had dinner with Michael Ovitz, the former Hollywood superagent who once oversaw the careers of Madonna and Michael Jackson, and Lucian Grainge, the chairman and CEO of UMG. Grainge’s reaction to his proposal was summed up by Ackman as “Lucian encouraged us to send it in.”

Watching this unfold gives me the impression that it was never just about money. It’s obvious that Ackman thinks Universal’s stock price, not its operations, is flawed. On the first point, he is most likely correct. Despite annual growth in global music revenues, UMG’s shares have lost almost one-third of their value since the Amsterdam IPO in 2021.

With nine of the top ten global recording artists of 2025 on its roster, including Taylor Swift, Kendrick Lamar, and Billie Eilish, the company still trades at 21.8 times earnings while Spotify, which essentially relies on UMG’s catalog to operate, commands 40 times. Either a significant market failure or a sign that investors are aware of information that the company’s management is unwilling to acknowledge is indicated by that gap.

The offer, which is structured as a cash-and-shares merger through Pershing’s SPARC Holdings vehicle, values UMG at approximately 30.40 euros per share, which is 78% more than the stock’s pre-news value. For each UMG share they own, UMG shareholders would receive 0.77 shares in the newly merged business and 9.4 billion euros in cash. The new company would be listed on the New York Stock Exchange after being incorporated in Nevada. It’s not nuanced. In essence, Ackman is stating that Amsterdam was never the correct address.

After years of advocating for a US listing, Ackman may have come here primarily out of frustration. UMG withdrew from an agreement with Pershing that had granted the fund the right to request one, delaying plans for that exact listing last month. It must have hurt. Prior to the 2021 Amsterdam IPO, Pershing purchased a 10% share in UMG from Vivendi with the specific understanding that New York would eventually follow. Instead, while the music industry continued to expand, there was a delay, poor performance, and a decline in share price.

The challenges are substantial and genuine. The French billionaire Vincent Bolloré’s family has a disproportionate influence over any significant decision because the Bolloré Group owns 18.5 percent of UMG and, crucially, controls 80 percent of the company’s voting rights. 13.4% is held by Vivendi. Tencent is a major investor.

None of these individuals have expressed public enthusiasm for Ackman, who needs their support (4.7%). The offer is non-binding and could fail, according to ING analysts, but it raises legitimate concerns and presents a strong argument for significant change at the company.

The larger context in which all of this is taking place is difficult to ignore. Yes, the music industry is expanding, but it is also experiencing anxiety in ways that were unthinkable ten years ago. Songs produced by AI are overtaking streaming services. Deepfakes that mimic genuine artists are a daily annoyance. The fragility of the relationship between labels and platforms was exposed when UMG threatened to remove its entire catalog from TikTok in 2024 due to royalty disputes and AI-related issues.

The growth of streaming, which saved the industry from collapse during the piracy era, is now slowing down. Analysts at Wells Fargo pointed this out clearly. The markets are pricing in the uncertainty surrounding the next stage of revenue growth.

The “complex matrix” of external factors affecting UMG’s valuation, including streaming economics, AI anxiety, royalty disputes, and general market hesitancy about where music revenues go from here, was aptly described by music industry adviser Tony Rigg.

That has nothing to do with how successfully Grainge has managed the business. He has done a fantastic job running it by most standards. However, effective management and a high share price are two different things, and UMG currently only has the former.

Regardless of whether Ackman’s bid is successful or unsuccessful, it has already accomplished one beneficial goal: it has sparked a discussion about Universal Music’s true value and who should make that determination.

The $64 billion offer for the biggest music company in the world is sufficient evidence that the era of consolidation in the music industry is here and accelerating. It seems that Ackman, Ovitz, and Grainge had a courteous dinner. What follows will be anything but.