The TikTok app from ByteDance Ltd. will be shown in the App Store on a smartphone on a regular photo taken in Arlington, Virginia, on Monday, August 3, 2020.
Andrew Harrer | Bloomberg | Getty Images
Walmart said it is partnering with Microsoft in a bid for TikTok.
The retail giant confirmed to CNBC that it is interested in buying the tech company.
Walmart shares are up more than 5% on the news.
TikTok is approaching an agreement to sell its US, Canadian, Australian and New Zealand operations in a deal likely to $ 20 billion to $ 30 billion range, sources say. It has not yet chosen a buyer, but could announce the deal in the coming days, sources say.
With Walmart’s confirmation, it joins several others bidding on the tech company, including Oracle.
Walmart is following the acquisition at a time when it is trying to better compete with Amazon. It plans to launch a membership program soon, called Walmart +. The subscription-based service is the retailer’s response to Amazon Prime, which includes original TV shows and movies.
In a recent Walmart call, CEO Doug McMillon acknowledged the buzz surrounding the membership program – but did not say when it would launch or what benefits it would use to stand out. He said the program will accelerate deliveries for customers by picking up and delivering from the sidewalk, strengthening relationships with them and collecting valuable data.
Walmart had previously worked on a deal with Softbank, but that bid stood up to resistance from the U.S. government because it did not include a rumored component of cloud technology, people familiar with the matter said.
With Microsoft involved, Walmart could be better positioned. Two years ago, the retailer announced a five-year cloud agreement with Microsoft in which the retailer adopted Microsoft’s Azure Cloud infrastructure and a bundle covering the Office 365 productivity applications.
In a statement, the big box retailer said TikTok’s integration of e-commerce and advertising “is a clear advantage for makers and users in those markets.” It did not say how it would use TikTok or if it would be part of Walmart +.
“We believe that a potential relationship with TikTok US in partnership with Microsoft can add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers, as well as grow our marketplace and third-party advertising businesses,” it said. “We are confident that a Walmart and Microsoft partnership will meet both the expectations of U.S. TikTok users, while addressing the concerns of U.S. government regulators.”
CNBC’s Alex Sherman en Jordan Novet contributed to this story.
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