The owner of TikTok “ByteDance” reportedly wants a valuation of $60 billion for its US operations. The Chinese owner ByteDance reached an agreement with Oracle and Walmart this weekend, under which both companies will take a 12.5% and 7.5% share respectively in the Chinese firm. According to the details, both companies will pay a combined $12 billion if the asking price is met.
The US initially planned to ban TikTok from Apple and Google’s stores on Sunday. The decision has now been delayed by a week according to the Department of Commerce because of ongoing valuation and purchase expectations.
TikTok’s Chinese owner ByteDance is seeking a valuation of $60 billion for TikTok Global, its proposed new US company, Bloomberg has reported Sunday.
According to Bloomberg, citing an anonymous source, that technology services company Oracle and retailer giant Walmart will take stakes of 12.5% and 7.5%, respectively in TikTok Global. The two will pay a combined $12 billion if they agree to ByteDance’s $60 billion asking price.
The deal gives China’s ByteDance 12 months to hold an initial public offering in the US.
Bloomberg added the final valuation has still not been calculated, as both firms still need to decide on measures for data security as well as the equity structure. However, the deal is still pending approval from China.
The company has prevented its video-sharing app from banned for at least a week as the US previously announced Friday it would ban all new downloads of TikTok and WeChat starting Sunday, demanding that the app be removed from Apple and Google’s app stores.
“I approved the deal in concept,” US President Donald Trump told reporters Saturday. TikTok has been scrambling to find a US buyer for its operations, or it risks being banned altogether in the United States. The US says that the app threatens the country’s national security and ByteDance needs to find a US buyer for TikTok.
TikTok, a video-sharing app that resonates with teenagers has taken the world by storm. It has however become a major sticking point in the trade war between the US and China that began in 2018. TikTok was in discussions for a possible take-over by Microsoft, but those talks broke down after ByteDance rejected its offer.
The US administration has claimed the new entity will be controlled by Americans, but CNBC said ByteDance will still retain an 80% stake in TikTok Global. A judge blocked a US effort over the weekend to ban Chinese messaging app WeChat, owned by Tencent.
ByteDance has said it will not transfer its algorithms to Oracle, a condition the US administration was pushing for. The company had planned to list its entire business in a global IPO, but back in July was said to be considering a listing in Hong Kong only, after diplomatic relations between the United States and China deteriorated.