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Oracle Wins TikTok US Operations Deal, Beating Microsoft, Walmart

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Key Points

  • Microsoft announced that ByteDance Ltd., TikTok’s parent company, turned down its bid to acquire the video-sharing app’s US operations.
  • Before the Chinese government weighed in with new rules imposing limits on technology exports, TikTok’s US operations were valued at around $25 billion based on Oracle’s and Microsoft’s early offers.
  • The terms associated in the deal with Oracle is still evolving.
  • Visit The Financial Today’s homepage for more stories.

Microsoft announced that ByteDance Ltd., TikTok’s parent company, turned down its bid to acquire the video-sharing app’s US operations. People familiar with the matter said that Oracle’s proposal appears to be more like a corporate restructuring than an outright sale.

“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft,” Microsoft announced in a statement on Sunday. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

Before the Chinese government weighed in with new rules imposing limits on technology exports, TikTok’s US operations were valued at around $25 billion based on Oracle’s and Microsoft’s early offers.

Microsoft, which was working with Walmart Inc., had been considered the favorites to bag the deal, but the negotiations with the video-sharing app had cooled off in recent days. Microsoft wasn’t requested to revise its initial proposal in light of current indications of opposition to a deal from the Chinese government.

The terms associated in the deal with Oracle is still evolving. One of the potential outcomes could involve Oracle purchasing a stake of a newly formed US business while serving as TikTok’s technology partner by housing the video-sharing app’s data in Oracle’s cloud servers.

It’s also unclear whether a deal with Oracle will pass with the Trump administration, where various parties have been pushing for a complete shutdown or an outright sale of TikTok to an American company, one person familiar with the matter from the White House said.

The Chinese government announced that it has a plan to be closely involved in the approval of any deal that involves exporting key algorithms needed in the sale.

ByteDance, on the other hand, appeared eager for a more limited agreement than what Microsoft presented in their bid. TikTok’s parent prefers a deal where it would retain more control of the company.

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