Kuke acquires controlling stake in Naxos Music Group for $106.35 million

BEIJING - Kuke Music Holding Limited (NYSE:KUKE), a classical music services platform in China with a current market capitalization of $33.46 million, has acquired a controlling stake in Naxos Music Group through transactions valued at approximately $106.35 million, according to a company press release. The deal comes as Kuke faces challenging market conditions, with its stock down over 70% year-to-date according to InvestingPro data.

The deal, completed on September 17, 2025, was structured through two transactions involving Naxos One Holding Limited and its shareholder Desun Holding Limited. Kuke first subscribed to 17,500 newly issued Class B ordinary shares of Naxos One for $105 million, then acquired 108 Class A ordinary shares from Desun for $1.35 million. The acquisition’s size is notable given Kuke’s recent financial performance, with InvestingPro data showing a 35.55% revenue decline in the last twelve months and negative earnings of $8.9 million.

The transaction was settled entirely through the issuance of Kuke’s Class A ordinary shares as consideration, with approximately 661 million shares issued at a value of $0.1608 per share. This price represented a 30% discount to Kuke’s average ADS closing price for the 60 trading days preceding the transaction.

Following the acquisition, Kuke now holds approximately 70.43% of the outstanding shares of Naxos One, which controls Naxos Music Group.

Naxos Music Group, established in 1987 and headquartered in Hong Kong, is recognized as one of the world’s leading classical music organizations with an extensive catalog of recorded albums and digital tracks available globally.

"This strategic acquisition of Naxos Music Group represents a landmark transaction that will significantly enhance our position as a leading classical music services platform," said Peixian Tan, Chairman and CEO of Kuke, in the press release. With a current ratio of 0.34, the company faces some near-term liquidity challenges that will need to be managed alongside this strategic expansion. Get access to 12 additional key insights and detailed financial analysis with InvestingPro.

The transaction received approval from Kuke’s shareholders, Board of Directors, and Audit Committee, following review of an independent valuation report. The existing shareholders of Naxos One did not exercise their preemptive rights or tag-along rights prior to their expiration on September 25, 2025.

In other recent news, Beijing KUKE Music has regained compliance with the New York Stock Exchange’s quantitative continued listing standards. The NYSE confirmed that Kuke has met the necessary market capitalization and shareholders’ equity requirements. Additionally, KUKE Music has entered into a strategic partnership with People’s Music Publishing House to focus on global music collaboration and support for young Chinese musicians. In a separate development, KUKE Music has signed a cooperation agreement with Great Wall Motor (GWM) to integrate a customized in-car music application in GWM’s new intelligent electric vehicles. This application will first be deployed in GWM’s WEY brand vehicles, utilizing KUKE’s classical music library and AI algorithms. These collaborations highlight KUKE Music’s efforts to expand its digital music ecosystem and explore automotive partnerships.

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