Donald Trump has offered strong support for the deal he said would create 25,000 jobs in the United States.
WASHINGTON / NEW YORK:
US President Donald Trump has said he supports a deal that will allow TikTok to continue operating in the United States, after threatening to ban the China-owned app in August.
He told reporters at the White House that he supports the deal with ByteDance, Oracle and Walmart, owner of TikTok, to create a new company that will take over TikTok’s US operations, called TikTok Global.
The US Treasury said in a statement, “Oracle will be responsible for primary technology and security responsibilities to protect all US user data. Transaction approval is subject to conclusion with Oracle and Walmart and documentation and the necessary conditions must be approved by “the Committee on Foreign Investment in the United States.
The Commerce Department said on Saturday it would delay an order that was due to go into effect Sunday night and that would prevent Alphabet Inc.’s Google and Apple Inc from offering TikTok in their U.S. app stores for a week.
A person briefed on the matter said the administration had given the parties a week to complete the deal.
U.S. shareholders are expected to control 53% of TikTok Global, a person briefed on the matter said, while Chinese investors would own 36%.
Trump said the new company would be “totally controlled by Oracle and Walmart … All control is Oracle and Walmart.”
Oracle has said it will take a 12.5% stake in TikTok Global.
TikTok said as part of the deal, Oracle and Walmart will participate in a TikTok Global pre-IPO funding round in which they could take up to a 20% cumulative stake in the company.
The remaining 80% will be held by ByteDance but it is not clear whether the ByteDance shares in TikTok Global will be distributed to ByteDance investors when TikTok Global is incorporated, according to the source.
US investors currently own around 40% of ByteDance.
TikTok said it was “happy that the proposal from TikTok, Oracle and Walmart will resolve the security concerns of the US administration and resolve issues regarding 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 securing associated computer systems to ensure that US national security requirements are fully met. “.
Trump has offered strong support for the deal he said would create 25,000 jobs in the United States. “I gave my blessing to the deal,” Trump said. “I approve of the deal in concept.”
About 100 million Americans use TikTok, and U.S. officials have expressed concern over user data and the potential for China to access that data.
“The security will be 100%,” Trump told reporters.
Reuters reported Thursday that TikTok Global will have a majority of U.S. directors, a U.S. chief executive and a security expert on the board.
ByteDance has accepted strong security guarantees on US user data, with Oracle hosting all data and obtaining the right to inspect TikTok source code.
Walmart did not immediately comment.
Trump expressed his displeasure this week that government lawyers told him that it was not permissible to demand a “portion” of TikTok’s sale price for the Treasury.
He said there would be a $ 5 billion U.S. education fund as part of the deal. “It is their contribution that I was asking for,” Trump said.
He said the new company would most likely be incorporated in Texas and have at least 25,000 employees.
Reuters reported Thursday that ByteDance is planning an initial US public offering of TikTok Global. The filing of an IPO for TikTok Global would be on a U.S. stock exchange and could take place in about a year, the sources said, requesting anonymity as the matter is confidential.
Some 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 has yet to approve the deal. “We’ll see if it all goes or not,” Trump said.
Texas Governor Greg Abbott said on Twitter earlier that he spoke to Trump about the deal. “I let him know that if he approves the deal, Texas would be the perfect location for the HQ,” Abbott said.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
