Tencent Music Entertainment (TME) is in advanced talks to acquire Chinese podcasting company Ximalaya Inc. in a deal valued at $2.4 billion, according to Bloomberg. The acquisition would involve a combination of cash and shares and would expand TME’s offerings beyond music. Ximalaya’s investors include Tencent Holdings, Baidu, and Sony Music Entertainment, with Sony Music having acquired 4.6 million Series E-2 preferred shares in Ximalaya for $50 million in 2020.
The sale could be finalized in the coming weeks, although discussions are ongoing and no final decisions have been made. Both Tencent Music and Ximalaya have declined to comment on the potential deal. TME continues to diversify its business, as shown in its 2024 ESG report, which detailed expanded AI capabilities including music creation tools for users on QQ Music. Ximalaya had 303 million monthly active users as of 2023 and previously filed for an IPO in 2021, though those plans were delayed.
The acquisition would help TME compete more directly with global streaming companies like Spotify, which has expanded beyond music into podcasts and audiobooks. TME reported strong financial results in 2024, with subscription revenue increasing 25.9% year-over-year to RMB 15.23 billion ($2.12 billion), and its paying music subscribers reaching 121 million in Q4 2024, a 13.4% increase from the previous year.
TME has also invested significantly in AI, integrating DeepSeek’s large language models and an AI Songwriter tool across its platforms. The potential Ximalaya deal would follow the trend among music streaming services to expand into podcasts and audiobooks, an area where Spotify has made major investments. Spotify’s move into audiobooks last year, including 15 hours of monthly listening in its Premium tiers, led to changes in royalty classifications and new licensing deals with Universal Music Group and Warner Music Group.
