The U.S. President Donald Trump has said that he has agreed to approve the deal between ByteDance and Oracle to keep TikTok running in the United States. The development comes just as TikTok was set to be restricted in the country from today.
A couple of days ago, the White House confirmed that the Tencent-backed WeChat and BytaDance’s TikTok will be banned from the App Store and Play Store, as well as all the transactions to WeChat, will be blocked. A broader ban on TikTok was delayed till 12th November because of the on-going negotiations.
In regards to approval, Donald Trump said, “I have given the deal my blessing. If they get it done, that’s great. If they don’t, that’s okay, too. I approved the deal in concept.”
As a part of the agreement, ByteDance will spin-off TikTok’s global business into a new US-headquartered company that will continue to be majority-owned by the Chinese tech group under new management.
It is said that Oracle as well as Walmart will take a stake of up to 20 percent in the new company. While the discussions are not yet finalized, the valuation of this new company could be around $50 billion to $65 billion.
Oracle has confirmed that TikTok will run on the Oracle Cloud and the company will become a minority investor in TikTok Global. On the other hand, Walmart said that it plans to take a 7.5% stake in the new company, and CEO Doug McMillon would serve on its five-member board.
However, the deal will also need to be approved by the Chinese government. In a move to retaliate U.S. actions, China has announced new sweeping powers to curb trade, investment, and operations of foreign companies deemed “unreliable” and thus, the deal could face issues getting approval from Beijing.