Tencent, China’s largest social media and gaming company, said terms of the proposal, including size, price and range, have not yet been finalized. Tencent Music Entertainment Group has picked banks to advise on a planned initial public offering in the US that could raise at least $1 billion, people with knowledge of the matter told Bloomberg in May.

The announcement follows a similar move by Tencent last year in Hong Kong with its online reading business, China Literature Ltd. Its music platforms — QQ Music, KuGou and Kuwo — are becoming important vehicles for pop stars such as Katy Perry and Rihanna to reach a Chinese audience, alongside homegrown artists like Jason Zhang and Joker Xue.

Tencent has the advantage of a fully developed entertainment and content empire that encompasses the ubiquitous WeChat messaging app, games, video-streaming, a karaoke app and content-licensing deals with more than 200 international and domestic record companies. But like perennial rivals Alibaba Group Holding Ltd., Baidu Inc. and Netease Inc., Tencent has to contend with the rampant piracy that’s eroding the industry’s profits.

It also counts Spotify as an investor and partner. While the companies don’t compete in China, they come up against each other in regions such as Southeast Asia as both looks for growth.

Stockholm-based Spotify Technology SA went public earlier this year and currently has a market value of $31 billion. In May, the Financial Times said Tencent Music Entertainment’s listing could value the company in excess of $30 billion. Valuation could partly depend on where Spotify was trading at the time, the paper said.