TikTok owner ByteDance is seeking a $60 billion valuation in the US, according to a report by Bloomberg. In a deal that already has Trump’s approval, Oracle will access up to 12.5% stake of the company, while Walmart will have rights to buy up to 7.5% stake in TikTok Global. The two American companies will pay $12 billion for the stakes if they consent to the valuation.
Investors SIG, General Atlantic, Sequoia, and Coatue are also expected to own part of the stake. However, parties in the transaction are yet to settle on a final valuation.
On Saturday, US President Donald Trump approved the Oracle-TikTok deal and delayed the earlier ban which would have removed the app from the Google Play Store and Apple Store. The Department of Commerce will delay the TikTok ban by seven days to allow the parties to finalize on the transaction, setting the new ban date on Sunday, 27, 2020 11:59 pm.
A press release from the Department reads;
“…at the direction of President Trump, will delay the prohibition of identified transactions pursuant to Executive Order 13942, related to the TikTok mobile application that would have been effective on Sunday, September 20, 2020, until September 27, 2020 at 11:59 pm.”
Terms of the Approved Oracle – TikTok Deal
TikTok Global will be an independent American company with a headquarters in the US as well as four Americans out of the five-member Board of Directors. Walmart CEO Doug McMillon will be one of the board members.
ByteDance will maintain a majority share in the company at approximately 80% stake.
All American data on the video-sharing platform will move to Oracle’s Generation 2 Cloud data Centers to eliminate security and sovereignty concerns. Oracle will also get full access to TikTok’s source code and updates to scrutinize for any possible backdoors.
A statement from Walmart on the deal says the company will bring its omnichannel retail capabilities on the platform, which will grow its ad business and its third party market place.
TikTok Global will pay over $5 billion in taxes to the US treasury, as well as create over 25,000 jobs in the US. The new company, together with Oracle, SIG, General Atlantic, Walmart, Sequoia and Coatue, will create an educational initiative to teach children via an AI-driven online video curriculum.
The deal will still require approval from the Chinese government.
