• Saturday, Oct 31, 2020
  • Last Update : 11:45 pm

Trump gives blessing to deal to allow TikTok to continue to operate in US

  • Published at 09:09 am September 20th, 2020
TikTok
File photo: TikTok logo is displayed on the smartphone while standing on the US flag in this illustration picture taken, November 8, 2019 Reuters

US shareholders are expected to control 53% of TikTok Global while Chinese investors will hold 36%.

US President Donald Trump said he supports a deal that will allow TikTok to continue to operate in the United States, after threatening to ban the Chinese-owned app in August.

He told reporters at the White House he backs the deal with TikTok owner ByteDance, Oracle and Walmart to create a new company that will assume TikTok's US operations called TikTok Global.

The US Treasury said in a statement “Oracle will be responsible for key technology and security responsibilities to protect all US user data. Approval of the transaction is subject to a closing with Oracle and Walmart and necessary documentation and conditions to be approved by” the Committee on Foreign Investment in the United States.

The Commerce Department said on Saturday it will delay by one week an order that had been set to take effect late Sunday that would stop Alphabet Inc's Google and Apple Inc from offering TikTok in their US app stores.

A person briefed on the matter said the administration had given the parties a week to close the deal.

US shareholders are expected to control 53% of TikTok Global, a person briefed on the matter said, while Chinese investors will hold 36%.

Trump said the new company will be “totally controlled by Oracle and Walmart ... All of the control is Oracle and Walmart.”

Oracle said it will take a 12.5% stake in TikTok Global.

TikTok said under the deal, Oracle and Walmart will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company.

The remaining 80% will be held by ByteDance but is not clear if the ByteDance shares in TikTok Global will be distributed to ByteDance’s investors when TikTok Global is incorporated, according to the source.

US investors currently own about 40% of ByteDance.

TikTok said it was “pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US Administration and settle questions around TikTok’s future in the US”

TikTok said Oracle will become the company’s “trusted technology provider, responsible for hosting all US user data and securing associated computer systems to ensure US national security requirements are fully satisfied.”


Also read - China launches sanctions regime after US moves on TikTok, WeChat


Trump offered strong support for the deal he said would create 25,000 US jobs. “I have given the deal my blessing,” Trump said. “I approve the deal in concept.”

About 100 million Americans use TikTok and US officials have expressed concern about user data and the potential for China to access that data.

“The security will be 100%,” Trump told reporters.

Reuters reported on Thursday that TikTok Global will have a majority of American directors, a US chief executive and a security expert on the board.

ByteDance has agreed to significant security safeguards on the data of US users with Oracle housing all data and getting the right to inspect the TikTok source code.

Walmart did not immediately comment.

Trump expressed annoyance this week that government lawyers told him it was not permissible to demand a “chunk” of any TikTok sales price for the Treasury.

He said there would be a $5 billion US education fund as part of the deal. “That’s their contribution I’ve been asking for,” Trump said.

He said the new company will most likely be incorporated in Texas and have at least 25,000 employees.

Reuters reported on Thursday that ByteDance is planning a US initial public offering of TikTok Global. The filing of an IPO for TikTok Global would be on a US stock exchange and could come in about a year, the sources said, requesting anonymity because the matter is confidential.

Parts of the proceeds from the IPO are expected to be used to finance the $5 billion education fund, the source said. ByteDance and Oracle did not immediately respond to requests for comment.

China still must approve the deal. “We’ll see whether or not it all happens,” Trump said.

Texas Governor Greg Abbott said earlier on Twitter that he had talked to Trump about the deal. “I let him know that if he approves the deal Texas would be the perfect place for the HQ,” Abbott said.

50
50
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail