Chinese technology giant Tencent has made further strides into the entertainment industry, snapping up a $3.4bn stake in the world's largest music company Universal Music Group.

A consortium led by Tencent has bought a 10pc stake in Universal Music, home to artists including Elton John and Lady Gaga, from French media conglomorate Vivendi, in a deal which values the music business at $34bn (£26bn).

Under the terms of the investment, Tencent and the others involved have the option to buy another 10pc of Universal Music at the same price within the next year.

It comes after months of talks between the companies, and following Vivendi's announcement in 2018 that it was looking to sell as much as 50pc of the music group.

Neither company disclosed which other business were involved in the latest deal, although Bloomberg reported Singapore's sovereign wealth fund and Hillhouse Capital had previously been approached by Tencent.

Tencent said it intended to "further deepen cooperation with Universal Music Group and drive the development of music entertainment market in China".