In a major move to secure its future in the United States, TikTok has finalized a deal to sell its American operations to a consortium of prominent U.S. investors. The agreement ensures the popular video-sharing platform can continue serving its massive user base without interruption.
The Details of the Deal
According to an internal memo obtained by The Associated Press, TikTok's parent company ByteDance has signed binding agreements with three American investment firms: Oracle, Silver Lake, and MGX. The transaction is scheduled to be completed on January 22.
TikTok CEO Shou Zi Chew confirmed the agreements in the memo. The new corporate structure will create a U.S.-based joint venture for TikTok's operations. Ownership of this new entity will be split among several parties.
New Ownership Structure
The investor group comprising Oracle, Silver Lake, and MGX will collectively hold a 50% stake in the new TikTok U.S. venture. Reports indicate each of these three firms will own an equal 15% share, totaling 45%, with the remaining 5% of that consortium stake likely held by other new investors.
The remaining 50% will be divided between existing ByteDance investor affiliates and ByteDance itself. Specifically, 30.1% will be held by affiliates of current ByteDance investors, while ByteDance will retain a 19.9% stake in the U.S. operations.
Implications and Next Steps
This deal represents a significant resolution to the longstanding regulatory and political challenges TikTok faced regarding its Chinese ownership. By transferring majority ownership and operational control to a consortium of well-established American companies, TikTok aims to address national security concerns raised by U.S. lawmakers.
The involvement of technology giant Oracle is particularly notable, as it previously served as TikTok's U.S. data security partner. This sale to American investors is expected to allow the platform to maintain its current features and service for its millions of users and content creators across the United States and Canada. The closure of the deal on January 22 will mark the beginning of a new chapter for the social media app under its revised ownership framework.
