# Universal Music Group Finalizes $70 Million Acquisition of Thailand’s Second-Largest Recorded Music Catalog

- Link: https://www.thailand-business-news.com/entertainment/165080-universal-music-group-finalizes-70-million-acquisition-of-thailands-second-largest-recorded-music-catalog
- Published: 2024-09-30T05:31:00+07:00
- Author: Arun Upadhyaya

**Universal Music Group acquired the remaining 30% of Thailand’s RS Group catalog
for approximately $18 million. UMG plans strategic acquisitions in high-growth markets
like China, India, Thailand, and Indonesia.**

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## Key Points

 * Universal Music Group (UMG) has fully acquired Thailand’s RS Group catalog for
   approximately $65-$70 million, completing a strategic M&A move that follows a
   70% stake purchase last year. UMG plans to focus on high-potential markets like
   China, India, and Indonesia for future acquisitions.
 * At UMG’s Capital Markets Day, CEO Sir Lucian Grainge outlined a triple-prong 
   strategy involving local A&R, support for entrepreneurs via Virgin Music Group,
   and targeted M&A in smaller but promising markets rich in local talent.
 * UMG expects to utilize significant free cash flow—up to $1.66 billion annually—
   from its adjusted EBITDA for acquisitions, post-dividend commitments. The firm
   aims to capitalize on the estimated 220 million potential streaming subscribers
   in these markets, reinforcing its growth trajectory.

**Summary of UMG’s Strategic Plan for High-Potential Markets**

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MBW Reacts, a series of analytical commentaries from Music Business Worldwide, addresses
Universal Music Group’s (UMG) recent acquisition maneuvers, specifically its procurement
of the RS Group’s recorded music catalog in Thailand, culminating in a total expenditure
ranging from USD $65 to $70 million. This purchase, comprising an initial 70% stake
and subsequently acquiring the remaining 30%, marks UMG’s commitment to significant
growth in emerging music markets.

During UMG’s recent Capital Markets Day, executives highlighted a proactive acquisition
strategy targeting “high-potential” markets, notably in Asia, Africa, and Latin 
America. These regions, including China, India, Nigeria, and several Southeast Asian
countries, are anticipated to experience explosive growth in streaming revenues.
UMG’s CEO, Sir Lucian Grainge, outlined a three-pronged approach encompassing local
artist and repertoire (A&R) development, support for regional entrepreneurs via 
Virgin Music Group, and strategic mergers and acquisitions (M&A).

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Grainge emphasized that while transformative acquisitions in established markets
may be rare, numerous opportunities lie within smaller, burgeoning ventures in these
high-growth regions. Boyd Muir, UMG’s EVP/CFO, supported this assertion, detailing
plans to convert approximately 60-70% of UMG’s adjusted EBITDA into free cash flow,
which will aid in the funding of future acquisitions while maintaining a dividend
commitment of 50% of adjusted net profits. UMG’s strategic investments are projected
to have a substantial impact, given that research suggests 220 million potential
streaming subscribers exist, predominantly in the identified high-potential markets.

The company’s robust financial health, including an adjusted EBITDA of approximately
USD $2.56 billion, positions UMG favorably to capitalize on growth opportunities
in the global music landscape for the coming decades. Ultimately, Grainge and Muir’s
remarks reflect a confident outlook on sustainably integrating emerging markets 
into UMG’s broader operational ecosystem, paving the way for significant corporate
expansion.

**Source** : [Universal Music Group just completed the $70m acquisition of Thailand’s second-biggest recorded music catalog… while suggesting many more M&A deals in ‘high-potential’ markets are on the way.](https://www.musicbusinessworldwide.com/universal-music-group-thailand-acquisition-70-million/?rand=157097)