As a part of the deal, ByteDance will remain the majority shareholder of the new entity, while Oracle will have a stake in the whole of TikTok and not just the US operations
Technology giant Oracle will invest as a minority shareholder in ByteDance-owned short video app TikTok’s global business, which will be placed in a new US-headquartered company, according to a report by the Financial Times.
As a part of the deal, ByteDance will remain the majority shareholder of the new entity, while Oracle will have a stake in the whole of TikTok and not just the US operations, the report added.
ByteDance had committed to “create TikTok Global as a US-headquartered company", US Treasury Secretary Steven Mnuchin, had told CNBC on Monday.
US President Donald Trump had earlier issued an executive order, giving the company 45 days to sell its US operations to a company in that country, the deadline for which ends on 20 September. Reports say that the deal may be finalised by this Sunday.
That said, it’s still not clear whether this will be a solution to the company’s troubles with the US government as lawmakers in the country are still looking over the deal.
ByteDance had rejected a bid from Microsoft earlier this week, leaving Oracle as the frontrunner for the deal. The Financial Times report also says potential investors include retail giant Walmart as well, which had entered a joint bid with Microsoft earlier. The exact details of the deal could still change, the report said.
The US deal has been in the spotlight for India as well, since the popular short-video app has also been banned here for similar reasons. Experts said that whatever happens in the US could turn out to be a blueprint for India, as it means there will be significant oversight from US authorities in ByteDance’s operations.
The Oracle-TikTok deal isn’t a licensing operation as many had earlier expected. Instead, Oracle is expected to provide technology to TikTok, handling its US data through its data centers and more. By retaining a majority stake in the company, ByteDance can also fulfill the needs of the Chinese government, which recently put restrictions on Chinese technology being sold to other countries.