Daily Management Review

TikTok Will Be Its Subsidiary In New Deal With US Firms, China's ByteDance Says


TikTok Will Be Its Subsidiary In New Deal With US Firms, China's ByteDance Says
Even though during the weekend, Oracle Corp and Walmart Inc said that they, along with the other United States based investors of ByteDance will own the majority of the short video sharing app TikTok after a deal was struck the US President Donald Trump’s administration, the Chinese owner of the app, ByteDance, said on Monday that the global business of TikTok will become its subsidiary after the deal.
ByteDance was given a period of 90 days to sell off TikTok to an American company through an executive order signed by Trump on August 14.  The Trump administration was concerned that the personal data of as many as 100 million American users of the app could be handed over to Chinese authorities. Trump would support a deal in principle that would allow TikTok to continue to operate in the United States, he said on Saturday.
However there are conflicts accounts of the deal that is available in the media.
More than 80 per cent of TikTok Global, a newly created US company that will have ownership of most of the operations of the app worldwide, will be owned by it, ByteDance said on Monday.
However a day before, American companies Oracle and Walmart said that American investors including the two companies would have majority ownership of TikTok. Oracle and Walmart have decided to 12.5 per cent and 7.5 per cent stake in TikTok Global respectively.
The news that American investors will be the majority owners of TikTok and that the Chinese owner of the short video sharing app would lose control over it was a “rumor”, ByteDance in its statement on Monday.
No comments on ByteDance’s statement were available Oracle and Walmart.
The discrepancy in the TikTok’s ownership statements by the two parties as clarified by reports quoting some sources close to the deal. The sources pointed out the 41 per cent of ByteDance is owned by US investors and therefore when this is combined with the proposed stake of Oracle and Walmart, it would be a majority stake  that would be owned by US investors. 
According to reports, the deal between ByteDance and Oracle and Walmart has pitted the valuation of TikTok at $60 billion.
Plans for an initial public offering of TikTok Global were also confirmed by TikTok. ByteDance founder Zhang Yiming as well as Walmart’s chief executive Doug McMillon and current directors of ByteDance will comprise the board of directors of TikTok Global, said the Beijing-based firm.
No further information on the composition of the board was provided by the company. 
Four out of the five members of the board of directors will be Americans, Oracle and Walmart said in a joint statement on Saturday.
Transfer of algorithms or technologies is not included in the current plan for TikTok Global. It however grants the power to Oracle to inspect TikTok US’s source code, ByteDance said. the company added that this sis the same as source codes of US companies like Microsoft Corp being shared with Chinese technology experts.
All of TikTok’s technology will be in possession of TikTok Global, Oracle and Walmart have said.