Vivendi is to sell a 10% stake in Universal Music Group to a consortium led by China’s Tencent.

The French media conglomerate has agreed to a $3.4B deal that values the record label at $33.6B. This comes after months of talks between the music group, which operates the labels responsible for artists including The Beatles, Taylor Swift and Nirvana, and the Chinese company.

Tencent Music Entertainment Group, through one of its wholly-owned subsidiaries, has proposed to join a consortium led by its parent company to acquire the stake.

The agreement also gives Tencent and its partners the right to increase their stake to as much as 20% at the same valuation until January 15 2021. The two companies also intend to enter into a second agreement that gives Tencent an option to acquire a minority equity stake in UMG’s Greater China business.

The transaction is subject to regulatory approvals and is expected to close by the first half of 2020.

“TME is thrilled to join the consortium in investing in UMG, and intends to further deepen the cooperation with UMG and drive the development of music entertainment market in China,” the Chinese firm said in a statement.