UMG Acquires MENA-based Chabaka Music
Universal Music Group (UMG), a leader in music-based entertainment, has entered into an agreement to acquire Chabaka. Chabaka provides digital distribution, marketing, publishing, and label and artist services in the Middle East and North Africa (MENA) region. This acquisition will bring together UMG’s global presence and expertise with Chabaka’s strong relationships and deep local repertoire.
The acquisition of Chabaka complements UMG’s current service offering and footprint in this fast-growing and dynamic MENA market. It will allow UMG to expand its services and reach within the independent label and artist community. The transaction is another demonstration of UMG’s strategy to increase its presence and accelerate its growth in high potential music markets around the world.
Following the acquisition, Chabaka will become part of UMG’s Virgin Music Group, working closely with the local Virgin and UMG teams in MENA. Through the combination of Virgin Music Group’s solutions, creative network, and global footprint and Chabaka’s services and regional expertise, the group will be uniquely positioned to build and reach the largest possible audience for talent from the region.
Ala’a Makki, Co-Founder and CEO of Chabaka, says, “These are inspiring times for the Arab region, which is one of the fastest growing music markets in the world. Joining forces with the largest music label in the world coincides with Chabaka’s 10th anniversary and marks an important milestone and a new phase for the company, its artists, and labels. Together with UMG, we will drive the transformation of the regional music industry and take it to new places, while creating new possibilities for local artists.”
Chabaka has agreements with more than 150 independent artists and regional labels across MENA. Makki believes that the Gulf region, Levant, Egypt, and North Africa are some of the most exciting places to be in terms of alternative, indie, and underground music. MENA recorded the world’s fastest revenue growth in 2021 at 34 percent, and ranked third in 2022 at 23.8 percent, according to the International Federation of the Phonographic Industry (IFPI), which represents the recording industry worldwide.
Global industry figures also show how popular streaming is in the region. People living in the UAE listen to an average of 22.5 hours of music a week, 22 percent higher than the global average. More than 480 million Arabic speakers live in the Arab countries, and with a huge global Arab diaspora maintaining its connection to its roots, this market has significant room for growth, particularly as the MENA region only accounts for 0.4 percent of global music revenues currently.
Chabaka Co-Founder, Tarek Makki added: “The region is at an inflection point, and this acquisition was the natural next step for us, our employees, and artists. A top priority for Chabaka was to select a partner that takes us to new heights while safeguarding our artists’ interests and bringing them new upstreaming opportunities at a global level, and who better to help us achieve that than the world leader in the music entertainment business and a company that deeply values innovation and entrepreneurship. Our shared vision is to continue fostering the incredible talents of this region and expanding their reach to a global audience. With UMG’s global platform, expertise, technology, and network, and Chabaka’s deep-rooted local experience, presence, and innovative strategies for artists’ management and revenue growth, we’re all set to bring an extraordinary and unique offering to the market.”
As part of the agreement, CEO Ala’a Makki will continue to lead the company and be instrumental in further growing Chabaka’s presence across geographies and business lines, supported by key members of the Chabaka team. Tarek Makki will remain as an advisor while also continuing to lead Concast and Boomerang Studios, the other two companies within CHBK Group, which will rebrand following the acquisition.
Patrick Boulos, CEO, MENA Region, UMG, said: “The MENA region is one of the fastest growing music markets in the world, representing untapped potential and opportunity. Chabaka is a unique collection of visionary leaders, artists, and labels and gives us both scale and opportunity, especially when combined with UMG’s world leading global platform. I am particularly pleased that Ala'a Makki and his team will join us and drive the next chapter of Chabaka’s success as part of the UMG family.”