Trump approved the purchase of TikTok by American companies Oracle and Walmart

A new twist in the TikTok case. President Donald Trump has agreed to a deal between Chinese ByteDance and American Oracle and Walmart. Now the owners of the application will create a company TikTok Global with headquarters in the United States, which is tentatively estimated at $ 20-50 billion.

US President Donald Trump leaves the White House on September 19, 2020. Photographer: Chris Kleponis, Bloomberg
Last Saturday, Trump announced to reporters that he agreed not to block TikTok in American stores for at least another week and approves of ByteDance’s partnership with companies from the United States.

“I approved the concept of the deal. If they do, that’s great. If not, nothing either.” — said Trump. “Everything will be under the control of Oracle and Walmart, two great American companies. 100% safe.”

According to Bloomberg, under the terms of the agreement, a new company called TikTok Global will lead the American segment of TikTok. The organization’s headquarters will be located in Texas and will hire “at least 25 thousand people.”

Oracle and Walmart intend to buy 12.5 and 7.5% shares of TikTok Global, respectively, and pay $12 billion for them. At the same time, ByteDance is seeking a business valuation of $60 billion, but the final valuation of the company has not yet been appointed. The parties have not developed a capital structure and measures to ensure data security.

So far, it is assumed that ByteDance will own 80% of the new company. But it’s worth considering that 40% of the Chinese developer already belongs to investors from the United States. Taking into account the shares of Oracle and Walmart, this figure grows to 53%. So, most likely, TikTok Global will be under the control of American investors, Bloomberg analysts note separately.

After the transaction is completed, TikTok Global also plans to conduct an IPO. At Trump’s request, the company will donate $5 billion of the amount collected as part of the placement to create an educational fund in the United States.

The Chinese government has not yet approved the deal. Although it is reported that Beijing can sign any agreement under which ByteDance will retain control over TikTok algorithms.

Also on the topic:

• TikTok and WeChat will be removed from American stores this SundayThe authors of TikTok refused to sell the application to Microsoft.
• Oracle will become a partner of the companyBloomberg: The US National Security Service is interested in Tencent gaming companies
• Is there any news?