GMM Grammy, one of Thailand’s leading music businesses, saw its stock price surge by 30.17% on Tuesday following the announcement of a strategic deal with Tencent.
On June 4, 2024, GMM Grammy’s stock price reached the ceiling limit, closing at 7.50 baht per share, an increase of 1.75 baht from the previous day. This significant rise came after the company disclosed on May 31 that it had sold a 10% stake in GMM Music to the Tencent group for 2,570 million baht. The transaction has led to an estimated total valuation of GMM Grammy at approximately 25,700 million baht.
The agreement with Tencent aims to enhance GMM Music’s value through a Spin-off plan, preparing for an IPO by expanding business operations, fostering growth, developing artists, and sharing expertise between the partnering organizations. Additionally, the deal opens new market opportunities, including expansion into China.
As reported by Prachachat Business, GMM Grammy sold 80 million shares, representing a 10% stake in GMM Music, to Black Serenade Investment Limited for 2,570.82 million baht. Black Serenade, established by Tencent Music Entertainment Group and Tencent Holdings Limited, will pay in cash and transfer 30% of Joox Thailand’s total issued and paid-up ordinary shares to GMM Tomorrow Limited, a subsidiary of GMM Grammy. This stake in Joox Thailand is valued at 918.15 million baht.
The transactions, involving the sale of GMM Music’s shares and the acquisition of Joox Thailand’s shares, are expected to conclude by the end of the second quarter of 2024. Post-transaction, Black Serenade will become the second-largest shareholder of GMM Music, while GMM Tomorrow Limited will hold a similar position in Joox Thailand.
GMM Music encompasses a wide range of activities including artist selection, music production, marketing, copyright management, digital and physical music distribution, concert and festival organization, and artist management. In 2023, GMM Music reported total revenues of 3,912.75 million baht and a net profit of 402.81 million baht. In the first quarter of 2024, it recorded a total revenue of 950.52 million baht, marking a 7.7% year-on-year increase, and a net profit of 137.12 million baht, reflecting a 56.83% increase. The company’s total assets stood at 3,028 million baht.
Joox Thailand, a subsidiary of Tencent Music Entertainment Group operating the JOOX online music streaming platform, reported a total revenue of 155.06 million baht in 2022, with a net loss of 99.04 million baht and total assets amounting to 46.93 million baht as of April 1, 2024.
Officials from GMM Grammy and Tencent emphasized that this partnership will significantly benefit both companies by leveraging each other’s strengths and expanding their reach in the music industry.
