A clash between a Trump administration order and a new Chinese regulation is likely to delay ByteDance’s planned divestiture of its U.S. TikTok operation, Bloomberg reported Thursday (Sept. 10), citing anonymous sources.
The general consensus of observers watching the sale process kicked off after President Donald Trump asserted keeping TikTok’s U.S. data under Chinese control posed a security risk has been that Oracle Corp. or Microsoft Corp., in partnership with Walmart, would buy the assets.
But as the Trump Administration’s Sept. 20 deadline for a sale looms, China has insisted on a new regulatory review, Bloomberg reported.
“ByteDance probably needs beyond the U.S. executive order ban on Sept. 20 to nail down an agreement with either party because of the regulatory review, said the people, asking not to be identified because the matter is private,” Bloomberg’s report states. “In preliminary talks with Chinese officials, ByteDance has been told any proposal must be submitted for approval with detailed information about technical and financial issues, and the review will be substantial and take time, one of the people said. The officials haven’t been willing to give specific guidance on what kind of deal would work, the person said.”
Microsoft and Oracle remain interested in buying TikTok’s U.S. operation despite the snag, according to Bloomberg.
Meanwhile, ByteDance has sued the U.S. government in federal court in a bid to block the forced sale or, at minimum, give the company more time to reach an agreement with a buyer. Among ByteDance’s claims in the suit are that the company has not been given a reasonable opportunity to prove TikTok under its current ownership structure does not pose a security risk to the United States.
The Wall Street Journal on Wednesday quoted a Treasury Department spokeswoman as saying, regarding any sale of TikTok assets in the U.S., that the agency “is focused solely at this time on discussions associated with the sale of TikTok in accordance with the August 14 divestiture order signed by the President.”
Reuters reported on Sept. 2 that one way ByteDance might mollify Chinese regulators would be to sell TikTok’s operation without the computer code that makes running it possible. Presumably Microsoft or Oracle could quickly generate replacement code.
Bloomberg said CB Insights puts the value of privately held ByteDance at $140 billion.
Selected by Fintech Tube