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US President Trump said on Tuesday (15): “I heard that Oracle (ORCL-US) is very close (to reaching an agreement with TikTok)” and the White House will soon decide whether to approve the agreement. The Financial Times (FT) reported that sources revealed that ByteDance will make TikTok an independent US company and place its global business under the US company. Oracle will be a minority shareholder and ByteDance will continue to retain it. Majority equity.
The Financial Times reported that people familiar with the matter have proposed to US officials the business conditions that can avoid the ban, that is, ByteDance will establish a new US-based company and place the global TikTok business under the company. Oracle will own TikTok instead of just ByteDance is the main shareholder of the new company for the equity capital of the US business; other US investors, possibly including Wal-Mart, will have a minority stake. The details of the transaction may still change.
US Treasury Secretary Steven Mnuchin said in an interview with CNBC on Tuesday that Bytedance promised to “make TikTok Global a US-based company.”
Jim Cramer, the host of CNBC’s financial show, said the US government will approve the transaction between Oracle and Bytedance as early as Tuesday afternoon, and Oracle will become TikTok’s technology partner.
The Trump administration asked ByteDance to sell the TikTok business in the United States; otherwise, the short video app would be disabled on September 20, but it did not disclose any requirements on the capital and corporate governance structure.
Trump said Tuesday, “I heard you are very close to a deal,” and is a fan of Oracle Chairman Larry Ellison.
The Committee on Foreign Investment in the United States (CFIUS) is currently reviewing TikTok, and Trump said he will soon decide whether to approve the transaction.
According to people familiar with the matter, it is currently unknown whether Trump will approve the transaction, and it is also unclear whether major investors in TikTok who have discussed acquiring minority stakes – General Atlantic, Sequoia Capital and Coatue Management LLC – will still join. This deal. After TikTok turned down Microsoft, it is unknown whether Wal-Mart (WMT-US), which cooperates with Microsoft, will continue to participate in the tender.
Bytedance’s proposals are reported to include: maintaining a majority stake in TikTok and establishing TikTok’s headquarters in the United States; Oracle becomes a technology partner, manages TikTok data and has a minority stake. ByteDance does not need to be the TikTok algorithm and apply for an export license from the Chinese authorities.
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