Ackman’s $64B UMG bid targets valuation gap, US listing pivot

Activist investor Pershing Square Capital Management said on Tuesday it plans to acquire Universal Music Group in a cash-and-stock transaction valued at approximately €55.8 billion ($64.4 billion) in a move that could shift the world’s largest music label toward a US listing while offering shareholders a substantial premium.

The deal, unveiled on Tuesday, values UMG at €30.4 per share, representing a 78% premium to its closing price on April 2.

Under the terms, shareholders would receive €5.05 per share in cash along with 0.77 shares in a newly formed entity, resulting in a total cash consideration of €9.4 billion ($10.85 billion).

UMG shares jumped as much as 28% in early trading in Amsterdam following the announcement, before paring gains to trade about 15% higher.

The stock is down roughly 11% this year. Shares of Vivendi and Bollore Group, both key stakeholders, also moved higher.

The proposed structure involves merging UMG with Pershing Square SPARC Holdings Ltd., an SEC-registered special purpose acquisition rights company, with the combined entity expected to list on the New York Stock Exchange.

The transaction is targeted for completion by the end of the year.

Ackman highlights valuation disconnect

Pershing Square CEO Bill Ackman said the deal aims to address persistent issues that have weighed on UMG’s stock performance since its listing.

“Since UMG’s listing, 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.

“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.”

Ackman pointed to factors including uncertainty around Bollore Group’s roughly 18% stake, the postponement of a US listing, and what he described as “suboptimal” shareholder communications as key reasons for the stock’s underperformance.

He also cited a “lack of investor credit” in the company’s valuation of its €2.7 billion stake in the music streaming service, Spotify.

Music rights have become one of the most compelling alternative asset classes in recent years, fuelled by steady streaming revenues, sync deals across film and television, and expanding monetisation through social media platforms.

Ackman a proponent for UMG's US listing

UMG, home to global artists such as Taylor Swift, Drake and Lady Gaga, was spun out of Vivendi and listed on Euronext Amsterdam in 2021 with an initial valuation of €46 billion.

In recent months, the company had explored a US listing but ultimately shelved those plans last month, citing market conditions that undervalued the business.

Ackman has been a vocal proponent of shifting UMG’s primary listing to the United States, arguing that deeper capital markets and improved liquidity could help close the gap between its trading price and intrinsic value.

Strong fundamentals underpin deal rationale

The proposed transaction comes against a backdrop of solid operating performance.

UMG reported revenue of €12.5 billion for 2025, marking an 8.7% increase at constant currency rates.

The company has also maintained a dominant position in global music charts, with nine of the top ten spots on the IFPI Global Artist Chart in 2025, underscoring the strength of its artist portfolio.

If completed, the deal would mark a significant shift in UMG’s market positioning, potentially unlocking greater investor interest while aligning the company more closely with US-listed entertainment and technology peers.