According to informed sources, ByteDance has reached a preliminary agreement with the White House on the sale of some of its short video app TikTok (TikTok overseas version). If the agreement is finally approved by the United States, ByteDance plans to list TikTok's global business in the United States.

It is reported that ByteDance intends to form a new company called TikTok Global. The board of directors will be composed of a majority of American directors, and the American CEO and security experts will be hired. ByteDance's top US investor, Oracle and potential investor Wal-Mart will hold at least 60% of TikTok's US business. Among them, Oracle has agreed to eventually hold a 20% stake in the company. If Wal-Mart also successfully negotiated the acquisition of equity, its CEO, Doug McMillon, is expected to join the board of directors.

Whether Trump will approve the agreement is uncertain. It is also unclear what assets TikTok Global will own in addition to its assets in the United States. According to reports, ByteDance has proposed to create 25,000 new jobs for TikTok by setting its headquarters in the United States in order to win Trump's support. It is also unclear whether ByteDance will submit this transaction to China in order to retain a majority stake in TikTok.

Bytedance hopes to reach an agreement with the White House as soon as possible, which will postpone the US ban on TikTok. President Trump threatened that the ban could take effect as early as next week. Trump ordered Bytedance to divest TikTok last month because of concerns about the personal data security of as many as 100 million American users who use the app. Recently, he reiterated his opposition to ByteDance's position of retaining a majority stake in TikTok.

According to people familiar with the matter, the terms and conditions will grant Oracle the right to inspect TikTok's source code and include many provisions to ensure data security, while requiring all US users' data to be kept in the United States. It is unclear what price Oracle or Wal-Mart will pay for the stake. Oracle, Wal-Mart and the US Treasury Department did not immediately comment.

Considering that bytedance investors recently valued TikTok at more than $50 billion, TikTok's initial public offering (IPO) may become one of the largest IPOs in the history of the technology industry. This will further reduce Bytedance’s holdings in the company and appease US officials. According to sources, the IPO will be filed on the American Stock Exchange and is likely to be carried out within one year. (Little)

Source: NetEase Technology Report, translated by Google Translate