A big reversal! U.S. President Trump told the media that he approved the transaction between the commercial software developer Oracle and TikTok, allowing TikTok to continue operating in the United States.
According to a CNN report, “I have given the deal my blessing” Trump said, “I have approved the deal in concept.”
Trump said that the new company’s headquarters would be located in Texas, employing up to 25,000 workers. The transaction also includes donations of US$5 billion to an education project.
On the grounds of national security, the United States forcibly required Chinese ByteDance to close or sell TikTok’s U.S. business to U.S. companies. It was originally scheduled to prohibit downloading TikTok on Sunday (20th). However, because of the recent positive developments, the U.S. Department of Commerce announced on Saturday that it would postpone the download ban for one week and take effect on the evening of the 27th of this month.
People familiar with the matter said that the postponement of the ban would allow TikTok’s parent company ByteDance to have time to complete the transaction with American companies Oracle and Walmart to establish a new company called TikTok Global to handle TikTok’s U.S. business.
Beijing’s Global Times reported that TikTok would open a round of Pre-IPO financing in the near future. Oracle and Wal-Mart will invest a total of approximately US$12.5 billion. After TikTok’s capital increase, the valuation will reach approximately US$62.5 billion. At the same time, ByteDance continued to control TikTok, Oracle and Wal-Mart received 12.5% and 7.5% of TikTok’s shares, respectively.
Oracle will become TikTok’s partner in data security compliance. The two parties will carry out data security compliance cooperation similar to Apple’s “Guizhou on the Cloud” in China.
TikTok will also unite multiple companies to invest in the establishment of a global education foundation with a total of 5 billion U.S. dollars to improve global education through technology and online video.
“We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world,” said Oracle CEO Safra Catz.
Analysts forecast claimed Walmart also has so many things to gain by tapping into a huge consumer base of mostly young people.
Besides being a major investor in the new TikTok company, Walmart said it would bring its e-commerce retail abilities to the app, which could allow TikTok users to shop Walmart online through TikTok.