Tencent plans spinoff, listing of online music unit

hong kong — Chinese internet giant Tencent Holdings Ltd is planning to spin off its online music entertainment business and list its shares in the US through a public offering, the company said in a filing to the Hong Kong stock exchange on Sunday.

Tencent, China’s largest social media and gaming company, said terms of the proposal, including size, price and range, have not yet been finalised. Tencent Music Entertainment

Group has picked banks to advise on a planned initial public offering in the US that could raise at least $1 billion, people with knowledge of the matter told Bloomberg in May.

The announcement follows a similar move by Tencent last year in Hong Kong with its online reading business, China Literature Ltd. Its music platforms — QQ Music, KuGou and Kuwo — are becoming important vehicles for pop stars such as Katy Perry and Rihanna to reach a Chinese audience, alongside homegrown artists like Jason Zhang and Joker Xue.

Tencent has the advantage of a fully developed entertainment and content empire that encompasses the ubiquitous WeChat messaging app, games, videostreaming, a karaoke app and content-licensing deals with more than 200 international and domestic record companies. But like perennial rivals Alibaba Group Holdin, Baidu and Netease, Tencent has to contend with the rampant piracy that’s eroding the industry’s profits. — Bloomberg