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WASHINGTON / NEW YORK: US President Donald Trump said he supports a deal that will allow TikTok to continue operating in the United States, after threatening to ban the Chinese-owned app in August.
He told reporters at the White House that he backs the deal with TikTok owner ByteDance, Oracle and Walmart to create a new company that will take over TikTok’s operations in the United States called TikTok Global.
Trump said the new company will be “fully controlled by Oracle and Walmart … All control is Oracle and Walmart.”
US shareholders are expected to control 53 percent of TikTok Global, said a person briefed on the matter, while Chinese investors will hold 36 percent.
Oracle said it will take a 12.5 percent stake in TikTok Global.
TikTok said that under the agreement, Oracle and Walmart will participate in a pre-IPO financing round of TikTok Global in which they can acquire up to a 20 percent cumulative stake in the company.
The source said that the remaining 80 percent of the shares will be distributed to ByteDance investors, a source briefed on the matter said.
American investors currently own about 40 percent 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 resolve doubts about the future of TikTok in the United States.”
Tiktok said Oracle will become the “company’s trusted technology provider, responsible for hosting all US user data and protecting associated computer systems to ensure US national security requirements.
Trump offered strong support for the deal that he said would create 25,000 jobs in the United States. “I’ve given my blessing to the deal,” Trump said. “I approve the deal in concept.”
Approximately 100 million Americans use TikTok, and US officials have raised concerns about user data and the potential for China to access that data.
“Security will be 100 percent,” Trump told reporters.
Reuters reported Thursday that TikTok Global will have a majority of US directors, a US CEO and a security expert on the board.
Oracle and Walmart are expected to take significant equity stakes and ByteDance has agreed on significant security safeguards on US user data, Oracle hosts all data and obtains the right to inspect TikTok’s source code.
Walmart had no immediate comment.
The Commerce Department said Saturday that it will delay an order that would take effect Sunday night and that would prevent Google and Alphabet Inc’s Apple Inc from offering TikTok in their US app stores.
Trump expressed his annoyance this week that he was told by government attorneys that he was not allowed to demand a “portion” of the TikTok sale price for the Treasury.
He said there would be a $ 5 billion education fund as part of the deal. “That is the contribution I have been asking for,” Trump said.
He said the new company is most likely incorporated in Texas and has at least 25,000 employees.
Reuters reported Thursday that ByteDance is planning an initial public offering of TikTok Global in the United States. The filing of an initial public offering for TikTok Global would be on a US stock exchange and could occur in about a year, said the sources, who requested anonymity because the matter is confidential.
Part of the proceeds from the IPO are expected to be used to fund the $ 5 billion education fund, the source said. ByteDance and Oracle did not immediately respond to requests for comment.
China has yet to approve the deal. “We’ll see if it all happens or not,” Trump said.
Texas Gov. Greg Abbott previously said on Twitter that he had spoken to Trump about the deal.
“I let him know that if he approves the deal, Texas would be the perfect location for the headquarters,” Abbott said.
