Jay-Z (L) and Jack Dorsey
Phillip Faraone | Getty Images
Square, Jack Dorsey’s digital payments company, is acquiring a majority stake in music streaming service Tidal, the company announced Thursday.
Square’s stock was down about 2% in the premarket.
The deal is expected to be a $ 297 million cash and stock mix and is expected to close in the second quarter of 2021. Existing artist shareholders will be the remaining stakeholders, Square said. Jay-Z, who bought Tidal for $ 56 million in 2015, will join Square’s board of directors.
Dorsey said Jay-Z will also “help run our entire business, including the merchant and cash app, once the deal closes.”
The move is an attempt to diversify Square, which is known for its credit card processor, payment hardware and Cash app. Most recently, the company officially launched its banking business.
Square said it does not expect Tidal’s financial results to have a material impact on Square’s consolidated sales or gross profit in 2021.
Tidal has struggled to keep up with the music streaming wars since launch, and Dorsey’s commitment could help move the company forward. Jay-Z and Dorsey have also partnered in the past. Last month, Dorsey said the pair had endowed a Bitcoin trust to support the development of the digital currency in Africa and India.