After an 11-month review, Tencent's acquisition of Ximalaya has received conditional approval. On May 12, China's State Administration for Market Regulation (SAMR) announced it had approved the equity acquisition of Ximalaya by Tencent Holdings Limited, subject to restrictive conditions.
Notably, the conditions include five key provisions. Specifically, Tencent is prohibited from raising prices for online audio streaming platform services, reducing service quality, or imposing unreasonable trading terms. It is also barred from bundling online audio streaming platforms or online music streaming platforms to automobile manufacturers, or from obstructing or restricting these manufacturers from procuring products from competitors.
An industry insider noted that the regulatory approval addresses the companies' commercial needs for resource integration and competitive response, while the strict conditions preserve sufficient space for market competition. For consumers, this means more choices and better experiences when listening to music or audiobooks in the future, without concern about being "locked in" by a single dominant player.
**Prohibition on Price Hikes and Service Reductions** The SAMR's May 12 announcement stated that the conditional approval of Tencent's acquisition of Ximalaya's equity was granted. The regulator stated that the decision is significant for maintaining fair competition in China's online audio streaming platform and online music streaming platform markets, preventing "involution-style" competition within the platform sector, and fostering innovation and healthy development of the platform economy.
What are the specific restrictive conditions? The announcement provided a clear explanation. After review, SAMR determined that the transaction could have the effect of eliminating or restricting competition in the Chinese online audio streaming platform and online music streaming platform markets. To effectively mitigate potential adverse effects from this concentration of undertakings, SAMR, following a comprehensive review and scientific assessment, made a conditional approval decision in accordance with the law. It requires Tencent, Ximalaya, and the post-concentration entity to make five restrictive commitments.
These five restrictive commitments specifically include: 1. Not raising prices for online audio streaming platform services, reducing service levels, or attaching unreasonable trading conditions. 2. Not reducing the proportion of free content and popular free content on online audio streaming platforms. 3. Not entering into exclusive licensing agreements with copyright holders of online audio streaming platforms and terminating existing exclusive agreements within a specified period. 4. Not bundling online audio streaming platforms or online music streaming platforms to automobile manufacturers, or obstructing or restricting their procurement of competitors' products. 5. Not restricting hosts from joining or distributing their copyrighted works on multiple online audio streaming platforms.
After evaluation, SAMR concluded that this commitment plan can effectively reduce the competition issues arising from the concentration. It can safeguard the legitimate rights and interests of consumers, copyright holders, hosts, and automobile manufacturers, and maintain fair competition in the relevant markets. Therefore, the conditional approval was granted on May 11.
SAMR stated it will strictly supervise the parties to ensure the effective fulfillment of the restrictive commitments, fully leverage the preventive role of merger control review, effectively uphold fair competition in China's online audio streaming platform and online music streaming platform markets, protect the legitimate rights and interests of market entities and consumers, prevent "involution-style" competition among platforms, and promote win-win development for platform enterprises, platform-based businesses, and workers.
"This is a regulatory operation that is both swift and steady," the industry insider commented. The regulatory approval addresses the companies' commercial needs for resource integration and competitive response, while the strict conditions preserve sufficient space for market competition. For consumers, this means more choices and better experiences when listening to music or audiobooks in the future.
**Tencent Music Q1 Revenue Rises 7.3%** The significance of Tencent's acquisition of Ximalaya was announced to the public 11 months ago. In June 2025, Tencent Music Entertainment Group (TME) announced on the New York Stock Exchange and Hong Kong Stock Exchange its plan to acquire Ximalaya.
The announcement indicated that Tencent Music would acquire Ximalaya for $1.26 billion in cash and up to 5.5686% of its total Class A ordinary shares. Based on Tencent Music's share price at the time, the total deal value was approximately $2.8 billion, equivalent to around RMB 20 billion.
According to the transaction terms, Ximalaya's founders and core management team will remain in their positions post-closing. Ximalaya will maintain its independent operational brand positioning and strategic direction, ensuring business continuity and stable user services.
Some market observers view this acquisition as a strategic upgrade for Tencent Music. As one of China's largest online music platforms, Tencent Music has faced challenges in recent years, including slowing growth in streaming revenue and subscription user expansion. Acquiring Ximalaya will significantly strengthen its position in the long-form audio segment, enabling a comprehensive content layout covering "music + long-form audio."
"More importantly, Ximalaya's content distribution and monetization logic naturally complement Tencent Music's user ecosystem. Leveraging the channel resources of the WeChat ecosystem, QQ Music, KuGou, and KuWo, Tencent Music can provide precise recommendations and multi-platform exposure for Ximalaya's long-form audio content, thereby driving cross-platform member growth and deeper commercialization of content," a market analyst noted.
On May 12, Tencent Music also released its unaudited financial results for the first quarter ended March 31, 2026. The data shows the company achieved total revenue of RMB 7.90 billion for the quarter, a year-on-year increase of 7.3%. Adjusted net profit was RMB 2.33 billion, up 4.8% year-on-year. Adjusted EBITDA reached RMB 2.83 billion, a 10.5% increase compared to the same period last year.
Looking at specific business segments, Tencent Music's music-related services were the primary driver of overall revenue growth. Revenue from this business line in the first quarter was RMB 6.51 billion, a 12.2% year-on-year increase. Within this, core music-related membership service revenue was RMB 4.57 billion, recording a 6.6% year-on-year growth.
Notably, Tencent Music's music-related non-membership service revenue saw significant growth in the first quarter, surging 28.0% year-on-year to RMB 1.94 billion, becoming a key growth driver in this earnings report.
At the operational level, Tencent Music stated it currently focuses resource allocation on two main areas: content and platform. On the content side, the focus is on expanding the licensed music library and developing original content, while also engaging in derivative businesses such as offline performances, music merchandise, and artist collaborations to broaden IP monetization channels. On the platform side, the priority is stabilizing the existing user base and covering user groups with different consumption needs through a multi-tiered membership service system, thereby supporting its overall commercial operations.
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