Tencent to spin off its music business and list its shares in the U.S.

Chinese internet giant Tencent has announced plans to spin off its online music business and float the unit in the U.S.

Tencent, which operates dozens of digital services, from social networking apps to ecommerce sites, listed its shares on the Stock Exchange of Hong Kong (SEHK) in 2004, but it has now sought and gained permission from the SEHK to carve out Tencent Music Entertainment Group and list it separately on an as-yet-undisclosed U.S. stock exchange.

Tencent Music is a major digital music service in China, operating QQ Music, in addition to KuGou and Kuwo, following its merger with China Music Corporation in 2016.

Today’s news comes just a few months after Spotify’s successful listing in the U.S., and Tencent’s existing ties with Spotify make the move particularly notable. Back in December, the two companies invested in each other, with Spotify taking a 9 percent stake in its Chinese counterpart and Tencent Music taking a 7.5 percent stake in Spotify. This deal was part of what the duo called a “strategic collaboration,” though it is not clear exactly what this will entail in the long run.

What we do know is that music streaming is going from strength to strength, with revenues from the likes of Spotify and Apple Music recently surpassing CD sales for the first time. And now Tencent wants to capitalize on its position as the music streaming market leader in China.

The company said the exact terms of its spin-off, including size, price range, and intended stock exchange, have yet to be finalized. “Further announcement(s) will be made by the company in relation to the proposed spin-off as and when appropriate,” Tencent said in a filing.