Global law firm Baker McKenzie and Chinese law firm FenXun, through the joint operation platform Baker McKenzie FenXun, have assisted Tencent Music Entertainment Group ("Tencent Music") in successfully entering into a definitive merger agreement for its proposed acquisition of a 100% stake in Ximalaya Inc. ("Ximalaya"). Ximalaya is one of the leading online audio platforms in China.
The transaction consideration includes USD 1.26 billion in cash, along with Class A ordinary shares not exceeding 5.1986% of Tencent Music's total issued and outstanding shares. Additional Class A ordinary shares not exceeding 0.37% of the company’s total shares will be issued to Ximalaya's founder shareholders, subject to the terms of the merger agreement. Upon closing of the transaction, Ximalaya will become a wholly owned subsidiary of Tencent Music. The closing of the transaction is subject to relevant regulatory approvals and certain other closing conditions.
Led by Partner Hong Zhang* in Shanghai, the transaction team included the following members:
• M&A/Private Equity: Senior Counsel Jill Sheng* and Associate Mia Liang* in Shanghai; and Partners Derek Liu and Roger Bivans, and Associate Dominique Manguiat in the US.
• Tax: Partner Luis Zhang* in Shanghai.
• Corporate and Dispute Resolution: Partners Tracy Wut, Bryan Ng and Sophia Man; and Associates Cheryl Tang and Victor Yip in Hong Kong.
Commenting on the deal, Ms. Zhang, who leads the China Private Equity Practice, said: “We are truly honored to have supported Tencent Music on this landmark agreement with Ximalaya. This transaction involved complex deal structuring, with several legal considerations, making it particularly challenging. We successfully executed this incredibly complicated deal with a holistic response, leveraging the strengths and expertise of our cross-border, cross-practice team. This deal highlights our ability to help clients navigate unprecedented legal challenges through innovative solutions that maximize the value of their investments.”
Mr. Liu, a senior technology M&A partner in San Francisco, added: “This transaction highlights how even a transaction between two China-based companies can involve the laws of multiple jurisdictions in critical areas. The collaboration between our China, US and Hong Kong offices, together with the support of the Conyers team, delivered our client top tier teams to advise on all M&A-related issues that arose in this deal, wherever the jurisdiction.”
* Members are from FenXun
The transaction consideration includes USD 1.26 billion in cash, along with Class A ordinary shares not exceeding 5.1986% of Tencent Music's total issued and outstanding shares. Additional Class A ordinary shares not exceeding 0.37% of the company’s total shares will be issued to Ximalaya's founder shareholders, subject to the terms of the merger agreement. Upon closing of the transaction, Ximalaya will become a wholly owned subsidiary of Tencent Music. The closing of the transaction is subject to relevant regulatory approvals and certain other closing conditions.
Led by Partner Hong Zhang* in Shanghai, the transaction team included the following members:
• M&A/Private Equity: Senior Counsel Jill Sheng* and Associate Mia Liang* in Shanghai; and Partners Derek Liu and Roger Bivans, and Associate Dominique Manguiat in the US.
• Tax: Partner Luis Zhang* in Shanghai.
• Corporate and Dispute Resolution: Partners Tracy Wut, Bryan Ng and Sophia Man; and Associates Cheryl Tang and Victor Yip in Hong Kong.
Commenting on the deal, Ms. Zhang, who leads the China Private Equity Practice, said: “We are truly honored to have supported Tencent Music on this landmark agreement with Ximalaya. This transaction involved complex deal structuring, with several legal considerations, making it particularly challenging. We successfully executed this incredibly complicated deal with a holistic response, leveraging the strengths and expertise of our cross-border, cross-practice team. This deal highlights our ability to help clients navigate unprecedented legal challenges through innovative solutions that maximize the value of their investments.”
Mr. Liu, a senior technology M&A partner in San Francisco, added: “This transaction highlights how even a transaction between two China-based companies can involve the laws of multiple jurisdictions in critical areas. The collaboration between our China, US and Hong Kong offices, together with the support of the Conyers team, delivered our client top tier teams to advise on all M&A-related issues that arose in this deal, wherever the jurisdiction.”
* Members are from FenXun
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