TikTok’s ban in the United States has been put off for a week as a deal with Oracle and Walmart comes closer to being reached.
Days ago it was all but certain TikTok would be removed from US app stores on Sunday, September 20, as per an executive order signed by President Trump.
The date is being moved ahead to September 27 after President Trump approved of a deal, “in concept,” which would see two US companies take control of TikTok’s operations in the country.
Conditions of the deal satisfy the government’s demands of parent company ByteDance having no oversight of TikTok’s US operations.
According to a report from Bloomberg, what also helped push the deal through is satisfying Trump’s demands of the government receiving a cut of the sale.
Here’s an overview of key details included in the deal that have been approved in concept.
- ByteDance Ltd. is seeking a valuation of $60 billion.
- Oracle plans to take a 12.5% share.
- Walmart has agreed to buy a 7.5% share.
- Oracle and Walmart would pay a combined $12 billion.
- A new company will be formed called TikTok Global.
- ByteDance will have “no decision-making authority, no ability to peer into” what the US company is doing.
- Oracle will be responsible for hosting all US user data.
- Walmart’s Chief Executive Officer Doug McMillon will serve on TikTok Global’s board of directors.
- Four of the five board seats will be filled by Americans.
- TikTok Global is said to be headquartered in Texas and create tens of thousands of jobs.
CNBC reporter Alex Sherman breaks down how the reported numbers equal a majority share of TikTok’s US operations:
So the ownership of TikTok Global will be, according to a person familiar with the matter:
Oracle – 12.5%
Walmart – 7.5%
ByteDance – 80% …
But 40% of ByteDance’s ownership is US venture capital funding. That’s how the Trump admin is calculating this deal as “majority US $”
— Alex Sherman (@sherman4949) September 20, 2020
We will find out within the week if the deal is approved. If not, then TikTok will be removed from US app stores.
TikTok released a lengthy statement confirming the proposed details of the deal, which you can read below.
— TikTok_Comms (@tiktok_comms) September 19, 2020