TME-SW (01698.HK) Completes Acquisition of Ximalaya: Up to USD1.26bn Cash + ~175.29mn Class A Shares

NewTimeSpace News: Tencent Music Entertainment Group (01698.HK) issued an inside information announcement on May 18, 2026, confirming the completion of the acquisition of Ximalaya on the same day.

Equity securities of Ximalaya held by its shareholders and employee stock plan participants were cancelled in exchange for the merger consideration, subject to applicable adjustments:

Cash: Up to USD1,260,000,000

Class A Shares: Up to 175,288,891 newly issued and incentive-related Class A ordinary shares of TME

Upon closing, Ximalaya is now a wholly-owned subsidiary of TME.

Strategic Significance & Regulatory Context

Deal Value: ~USD2.86bn (≈RMB20.5bn), one of China’s largest audio-sector M&A.

Market Position: Combined share in China’s online audio market reaches 45%–55% (TME: 0–10%; Ximalaya: 40%–50% in 2024).

Regulatory Approval: Approved by SAMR on May 12, 2026 with restrictive conditions (e.g., no exclusive licensing, no anti-competitive restrictions on hosts).

Strategic Fit: TME bolsters long-form audio (audiobooks, podcasts) to counter ByteDance’s aggressive expansion in free audio; Ximalaya gains financial/tech support amid profitability pressure.

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