American hedge fund Pershing Square, spearheaded by activist investor Bill Ackman, has made a significant move in the music industry by proposing a merger with Universal Music Group (UMG), citing that the world’s leading music label is being undervalued by investors. The firm has extended an offer to UMG shareholders that consists of 9.4 billion euros, approximately $10.9 billion, in cash, as well as 0.77 shares in the newly formed entity for each UMG share they hold.
This merger would involve the acquisition company Pershing Square SPARC Holdings, and following the transaction, the reorganized entity is expected to be listed on the New York Stock Exchange, marking a transition from UMG’s current listing on the Amsterdam Stock Exchange.
According to reports, the combined cash-and-stock proposal values Universal Music at around 30.40 euros, or about $35 per share—representing a striking 78% premium over its last closing price of 17.10 euros. If the merger proceeds, it could bring the total deal valuation to approximately 55.75 billion euros, which translates to around $64.31 billion.
The potential merger would create a powerhouse within the music business, bringing together top-tier artists such as Taylor Swift, The Weeknd, Lady Gaga, Billie Eilish, and Drake under one roof. Ackman expressed optimism about closing the deal by the end of 2026, highlighting that UMG’s stock has been negatively impacted by factors unrelated to its operational performance.
The hedge fund pointed to several concerns affecting UMG’s stock, including uncertainty surrounding the French conglomerate Bolloré’s intentions with its 18% stake in the company, delays in UMG’s listing on the U.S. stock market, and what Pershing Square describes as “underutilization of UMG’s balance sheet.” These issues, according to Ackman, have hampered the shares’ performance, prompting the current proposition to unlock UMG’s potential in the market.
