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Trump fires latest salvo in proposed TikTok deal with Oracle and Walmart

Mon 21 September 2020 14:23 | A A A

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(Sharecast News) - US president Donald Trump has warned that the White House could block TikTok's proposed tie-up with Oracle and Walmart if ByteDance seeks to retain overall control.

Under the recently-announced deal, which is not yet finalised, the hugely popular video-sharing app will spin off its global business into a new US-based company called TikTok Global. Software giant Oracle and retailer Walmart will take a combined 20% stake in the new entity, alongside ByteDance, TikTok's Chinese owner, ahead of an eventual initial public offering.

The new business is expected to be worth around $60bn, according to reports.

Over the weekend, Trump appeared back the deal, telling reporters: "I have given the deal my blessing. If they get it done, that's great, if they don't, that's fine too. The security will be 100%. Conceptually it's a great deal for America."

But on Monday, he warned in an interview with Fox News that approval could be rescinded if ByteDance sought to maintain control.

"If we find that they have total control, then we're not going to approve the deal. We will be watching it very closely," Reuters reported Trump as saying.

ByteDance has several American investors, and Oracle and Walmart said TikTok Global would be "majority owned" by US investors. But on Monday, ByteDance issued a statement insisting TikTok Global would be a "100%" fully-owned subsidiary and that it would have an 80% stake, the Financial Times reported.

The Chinese ownership of TikTok, which has around 100m active users in the US, is deemed a security threat by the White House. Trump - who has threatened to ban the app outright - initially wanted ByteDance to sell the US business, and Microsoft putting forward a proposal.

A TikTok spokeswoman said: We are pleased that the proposal by TikTok, Oracle and Walmart will resolve the security concerns of the US administration." Under the deal, Oracle will become TikTok's technology provider, hosting all US user data. The commercial partnership with Walmart is still being finalised.

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