ByteDance says TikTok's global business will be its subsidiary under deal with Trump

China’s ByteDance, on September 21, said that TikTok’s global business will become its subsidiary, even though Oracle and Walmart Inc said that they and the US investors would own the majority of the video app. While US President Donald Trump last week said that he supported a deal in principle that would allow TikTok to continue to operate in the US, ByteDance, on the other hand, said that it will own 80 per cent of TikTok Global, which is a newly created American company that will own most of the app’s operations worldwide. 

According to a Chinese media outlet, Toutiao, the Chinese company in a statement said that it was a ‘rumour’ that US investors would be TikTok Global’s majority owners. ByteDance said that it will retain full control of its prized social media algorithms and allow Oracle only limited access to view source code for ‘safety’ purposes. 

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Furthermore, ByteDance also confirmed that it would do a small round of pre-IPO (initial public offering) financing. The Chinese company said that TikTok Global’s board of directors will include ByteDance founder Zhang Yiming as well as Walmart’s chief executive Doug McMillon and current directors of ByteDance. Moreover, the Beijing based company said that $5 billion payment reportedly to be made to the US Treasure by TikTok Global is based on estimated income and other taxes that the company will need to pay over the following years and has nothing to do with the deal reached with Oracle and Walmart. 

READ: TikTok Owner ByteDance Seeking $60 Billion Valuation In Stake Sale: Report

Trump gives his ‘blessing’ to new deal 

Meanwhile, US President Donald Trump has announced his support for the proposed TikTok deal with Oracle and Walmart for the US operations of the Chinese social media app. After declaring TikTok a national security risk and even preventing federal employees from having the app on their office devices, Trump last month signed an executive order last month that would ban TikTok and other Chinese apps from operating in the US. The only way for TikTok to avoid the ban was to sell its US operations to an American company.

With the new deal, Trump said TikTok could now be based in Texas under Oracle and Walmart's control in the US. He added, “I have given the deal my blessing,”. “If they get it done, that’s great. If they don’t, that’s OK too”.

READ: Trump Backs TikTok Deal Involving Oracle And Walmart

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