US President only wants to approve TikTok deal if ByteDance transfers control
US President Trump has said that the TikTok deal will only get approval if Oracle and Walmart take full control of TikTok’s US arm. Under the current deal, ByteDance owns eighty percent of TikTok in the US.
President Donald Trump said during Fox & Friends on Monday that ByteDance will have nothing to do with the American branch of TikTok. “And if they do, we’re not going to approve the deal.” Oracle and Walmart are going to take “full control” of TikTok’s US arm and the controlling interest Trump said in the interview. “I assume the company will go on an IPO later, with ByteDance’s share going even lower.”
Trump emphasized in the interview that if there is any lack of control, or if there are security concerns, then the deal will not be approved. The US government will therefore continue to monitor the deal closely, according to Trump, but for now the deal looks ‘good’. The president also says it would be “nice” if the US division could keep the technology from TikTok, because it “is good for competition with other companies such as Facebook.”
How control is arranged in the deal between ByteDance, Oracle and Walmart is as yet unclear. This weekend it was said that Oracle would get 12.5 percent from TikTok Global and Walmart would get 7.5 percent. The remaining 80 percent would remain in the hands of ByteDance. Oracle will be responsible for the cloud services under this agreement. TikTok Global’s board of directors would receive a US majority.
The New York Times writes that under this deal, TikTok’s algorithm will remain in the hands of ByteDance. ByteDance has also said, according to the newspaper, that the Chinese company will keep 80 percent of the shares, until an IPO that should take place in ‘about a year’. However, the newspaper writes that Oracle would have disputed this statement on Monday. According to Oracle, upon founding TikTok Global, Americans will own the majority of the company and ByteDance will have no stock. TikTok will be banned in the United States on Sept. 27 unless the deal gets approval from President Trump.