Vivendi Sells Its 13% Beats Stake to Apple for $404 Million

Aug 01, 2014 6:58 am ET

(Updates with comment from analyst in second paragraph.)

Aug. 1 (Bloomberg) -- Vivendi SA sold its stake in Beats Electronics LLC to Apple Inc. for $404 million as part of the iPhone maker’s takeover of the headphone company.

The stake was about 13 percent, Paris-based Vivendi said today, and was held by the company’s Universal Music Group, the world’s largest record label. The investment almost doubled in value from an estimate of $214 million in September, said Conor O’Shea, an analyst at Kepler Cheuvreux in Paris.

Vivendi has announced more than $30 billion of asset sales since it began a strategy review about two years ago, including the pending disposal of mobile-phone unit SFR in a $23 billion deal. The company is seeking to focus on its media assets.

Apple agreed to buy Beats for $3 billion in May, its biggest-ever acquisition, with founders musician Dr. Dre and music-industry executive Jimmy Iovine joining the iPhone maker. While the deal, projected to close in the current quarter, includes Beats headphones and other hardware, Apple also is getting access to an Internet-based music streaming service, Beats Music. Beats’s investors also included private-equity firm Carlyle Group LP.

Vivendi will still have Internet-music assets among its investments, as Universal Music owns a stake in song-streaming service Spotify Ltd., which competes with Beats Music, as well as French rival Deezer.

“The industry missed out on the downloads opportunity years ago by not getting involved with iTunes when it was offered to the labels, so now as downloads are falling they don’t want to miss out on subscription services,” O’Shea said.

Vivendi shares declined 1.2 percent to 18.55 euros at 12:57 p.m. in Paris.

Universal Music declined to comment further on today’s sale.