Tencent, the Chinese company, is gearing up to spin off its Internet-based music business with a listing of shares to happen in the U.S.
According to a report in Bloomberg, the move will enable American investors to invest in a China-based music streaming service which has brought a breath of fresh air to an ailing industry. In China, Tencent is having growth with its music streaming service that is similar to the growth Spotify has had in the U.S. Streaming music sales have helped reignite the industry. Bloomberg noted that Tencent, which operates China’s largest social media and gaming platforms, is still coming up with the terms of the potential spin-off, which Bloomberg reported it disclosed in a filing with the Hong Kong Stock Exchange. Bloomberg noted Tencent Music Entertainment Group has already chosen the banks to advise on a planned initial public offering in the U.S. in which it could raise $1 billion or more, people with knowledge of the matter told Bloomberg back in May.
The potential listing comes as Tencent is in expansion mode — where it makes sense. It isn’t in a rush to launch its social networking platforms, music and services internationally — unless there is a space in the market that needs to be filled. Though Tencent runs China’s biggest social network, music, and gaming system — including billion user-strong WeChat messaging app — it is mostly unknown to Westerners. “People ask, when are we bringing WeChat to different countries,” Tencent Senior Executive Vice President Seng Yee Lau told Reuters in a recent interview. “Our answer has always been, for any digital services or products, … if they have a better way of meeting the needs of the local customers, then they have a basis to be in there. If they haven’t figured out a way to be a better alternative then we have no basis of being there.”