ByteDance seeks US$60b valuation for TikTok in deal with Oracle, Walmart: Bloomberg

BENGALURU/WASHINGTON: China’s ByteDance Ltd is seeking a valuation of US$60 billion (RM247 billion) for TikTok as Oracle Corp and Walmart Inc take stakes in the short-video app’s business to address US security concerns, Bloomberg News reported yesterday, citing an unnamed person familiar with the matter.

Oracle will take a 12.5% stake in TikTok Global and store all its US user data in its cloud to comply with US national security requirements, the companies said on Saturday. Retail giant Walmart said it would take a 7.5% stake.

The two companies would pay a combined US$12 billion for their stakes if they agree to a US$60 billion asking price, Bloomberg reported.

ByteDance, TikTok, Oracle and Walmart did not immediately respond to requests for comment on the report.

The final valuation had not been set as the companies worked out the equity structure and measures for data security, the Bloomberg report added.

ByteDance was racing to avoid a crackdown on TikTok after the US

Commerce Department said on Friday that it would block new downloads and updates to the app from yesterday.

US officials had expressed concern that the personal data of as many as 100 million Americans that use the app were being passed on to China’s government.

President Donald Trump said Saturday he had approved a deal allowing Oracle to become the data partner for TikTok to avert a shutdown of the massively popular app.

The deal, with Walmart as a commercial partner, would create a new US company named TikTok Global.

“I think it’s going to be a fantastic deal,” Trump said. “I have given the deal my blessing. If they get it done that’s great, if they don’t that's okay too.”

Shortly after, TikTok confirmed the agreement.

“We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US Administration and settle questions around TikTok's future in the US,” a TikTok spokeswoman told AFP.

ByteDance also confirmed the deal on social media, saying the three companies would reach an agreement that was “in line with US and Chinese law” as soon as possible.

Oracle could buy the 12.5% stake and Walmart 7.5% in TikTok before a future initial public offering,.

According to a source close to the matter, ByteDance would keep the rest of the shares. But since the Chinese company is 40% owned by American investors, TikTok would eventually be majority US-owned.

In a joint statement, Oracle and Walmart said TikTok Global would "pay more than 5 billion in new tax dollars to the US Treasury," while they and the other companies involved in the deal would launch an initiative to develop online education.– Reuters, AFP