It was reported a couple of months ago that Spotify was in “advanced talks” with SoundCloud over a potential acquisition. Not much was said about the potential deal after that and if a new report is to be believed, it appears that Spotify has given up on the idea of buying SoundCloud. One of the reasons why it may have decided not to pursue this acquisition is said to be the belief that it would impact Spotify’s long-anticipated initial public offering.
Citing a source at Spotify who is familiar with the discussions, TechCrunch reports that after months of talks between the two companies, Spotify has decided to back out of talks to buy SoundCloud.
The source adds that Spotify decided against the acquisition because it doesn’t want the “additional licensing headache in a potential IPO year.” It merits mentioning here that while Spotify hasn’t officially confirmed that it plans to go public next year, there has been a lot of speculation recently that 2017 is going to be Spotify’s IPO year.
A previous report suggested that Spotify declined to acquire SoundCloud twice in the past as it felt the price wasn’t right. It’s unclear what Spotify was willing to pay and how much SoundCloud was asking.