New Delhi, September 21: ByteDance, the Chinese owner of short video-sharing platform TikTok, on Monday said it will retain 80 percent stake in the newly created company TikTok Global. In order to protect TikTok from banning in the United States, ByteDance has joined hands with cloud major Oracle and Walmart Inc to form a new company called TikTok Global which will be headquartered in the US. TikTok-Reliance Jio Deal: Chinese Video Sharing App's Owner ByteDance May Sell India Business to Mukesh Ambani-led Company, Says Report.
ByteDance termed reports of a US company becoming TikTok Global’s majority owners a "rumor." The Chinese company stated that TikTok Global plans to launch a "small round of pre-IPO financing", after which it would become an 80 percent-owned subsidiary of ByteDance. US President Donald Trump has approved the deal between ByteDance, Oracle and Walmart. Interesting, Trump had earlier said that he did not like the idea of ByteDance having a majority stake in TikTok. Oracle-TikTok Deal: US President Donald Trump Says Looking Into The Deal to Ensure No Compromise on National Security.
How ByteDance, Oracle And Walmart Will Save TikTok From Banning in the US?
Under the deal, Oracle will be TikTok's secure cloud provider and will become a minority investor with a 12.5 percent stake. Walmart has agreed to a purchase 7.5 percent stake in TikTok, leaving 80 percent stake with China-based ByteDance. "TikTok Global will be majority owned by American investors, including Oracle and Walmart. TikTok Global will be an independent American company, headquartered in the US, with four Americans out of the five member Board of Directors," Walmart and Oracle said in a joint statement.
TikTok Global's board of directors will include ByteDance founder Zhang Yiming as well as Walmart's chief executive Doug McMillon and current directors of ByteDance. TikTok Global will have an Initial Public Offering (IPO) in less than 12 months and be listed on a US Exchange.
Why TikTok Was Facing Ban in US?
US President Donald Trump signed executive orders in August that threaten to ban TikTok in the US market unless the Chinese company finds a US buyer before September 20, citing threat to national security. The President later issued another order that gave ByteDance until November 12 to divest its interests in TikTok in the US. Acting on Trump's orders, the US Commerce Department last week said the app will be removed from app stores such as Apple App Store and Google Play Store from September 20.
(The above story first appeared on LatestLY on Sep 21, 2020 12:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).