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Earlier today, China’s ByteDance has stated that the global business will become its subsidiary, even though Oracle Corp and Walmart Inc would own the majority of the video app following a deal with the U.S. President Donald Trump’s administration, over the weekend.

Although the announcement of Oracle and Walmart buying out Tiktok’s US operations flooded across the globe this weekend, accounts of the deal remain to be quite unclear on both ends. ByteDance said today that it will own 80% of TikTok Global, a newly created U.S. company that will own most of the app’s operations worldwide. Oracle and Walmart, which have agreed to take stakes in TikTok Global of 12.5% and 7.5% respectively, had said on Saturday that majority ownership of TikTok would be in American hands.

As reported by Reuters, ByteDance said in its statement on Monday that it was a “rumor” that U.S. investors would be TikTok Global’s majority owners. Oracle declined to comment on ByteDance’s statement, while Walmart did not respond to a request for comment.

Source: Yahoo Finance

Some sources close to the deal have sought to reconcile the discrepancy by pointing out that 41% of ByteDance is owned by U.S. investors, so by counting this indirect ownership TikTok Global would be majority-owned by U.S. parties. One of the sources said the deal with Oracle and Walmart values TikTok Global at more than $50 billion.

TikTok also confirmed plans for an initial public offering of TikTok Global. The Beijing-based firm said 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.

According to statements made by ByteDance, “The current plan for TikTok Global does not involve any transfer of algorithms or technologies, and Oracle will be able to inspect TikTok U.S.’s source code. This is akin to U.S. companies such as Microsoft Corp sharing their source code with Chinese technology experts.”

ByteDance also said a $5 billion payment reportedly to be made to the U.S. Treasury by TikTok Global is based on estimated income and other taxes the company will need to pay over the next few years and has nothing to do with the deal reached with Oracle and Walmart. Trump last week had said there would be a $5 billion U.S. education fund as part of the deal.

Source: Reuters

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Rhea Sovani

Author Rhea Sovani

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