China, US Approve TikTok’s US Spinoff Agreement
The approval of TikTok’s US spinoff agreement marks a significant milestone in the ongoing US-China tech battle. Both countries have now consented to a deal that will transfer TikTok’s US operations to a consortium primarily comprising American investors.
Key Players in the Deal
- Lead Investors: Oracle and Silver Lake
- Other Investors: MGX, Susquehanna, Dragoneer, and DFO
- Parent Company: ByteDance
Deal Structure and Closing Details
ByteDance will retain approximately 20% of TikTok’s US business. The remaining stakes are divided among the leading investors, with each holding about 15% of the operational control.
According to reports, the closure of the deal is anticipated this week. TikTok’s CEO, Shou Chew, indicated in a memo that the agreement has progressed but faced scrutiny from regulators in the past.
Historical Context
This agreement concludes a lengthy and contentious saga involving national security concerns related to data privacy and algorithm control. In 2024, former President Joe Biden signed legislation mandating ByteDance to divest its US operations, which influenced negotiations heavily.
Financial Valuation
The US business unit of TikTok was valued at approximately $14 billion, according to US Vice President JD Vance, though the exact financial terms of the deal have not been disclosed.
Governance and Future Operations
The new entity overseeing TikTok’s operations will focus on critical aspects like data protection, content moderation, and algorithm security. It will operate under a new board of directors, mainly composed of American members.
Statements from Involved Parties
Representatives from the Treasury, White House, Oracle, and Silver Lake have not provided comments on the deal as of now. The Chinese embassy in the US reaffirmed its consistent stance on TikTok without offering new insights.
