By David Shepardson
WASHINGTON, Dec 18 (Reuters) – TikTok’s Chinese owner ByteDance has signed binding agreements with three major investors to sell just over 80% of the company’s U.S. assets to U.S. and global investors to avoid a U.S. government ban, TikTok Chief Executive Shou Zi Chew told employees on Thursday.
The deal is an important step toward resolving years of uncertainty about the future of the short video app in the United States since August 2020, when then-President Donald Trump first tried, unsuccessfully, to ban the app now regularly used by more than 170 million Americans.
The details of the deal are in line with one revealed in September, when Trump delayed until Jan. 20 the implementation of the law that bans the app unless its Chinese owners sell it amid efforts to extract TikTok’s U.S. assets from the global platform. It also stated that the deal met the terms of the divestiture requirements.
The company told employees on Thursday that ByteDance and TikTok signed binding agreements with three managing investors – Oracle, Silver Lake and MGX – to form a new TikTok joint venture in the US called TikTok USDS Joint Venture LLC.
Oracle declined to comment. The White House referred questions to TikTok. TikTok said in the memo that the deal will allow “more than 170 million Americans to continue discovering a world of infinite possibilities as part of a vital global community.”
The deal, set to close on Jan. 22, would end years of efforts to force ByteDance to sell its U.S. business over national security concerns.
Abu Dhabi-based Oracle, Silver Lake and MGX will collectively own 45% of the new entity, according to the memo, confirming what Reuters and other media reported in September.
The US joint venture will be 50% owned by a consortium of new investors, including Oracle, Silver Lake and MGX, with 15% each; 30.1% held by affiliates of certain existing ByteDance investors; and ByteDance will retain 19.9%, according to the memo.
ByteDance did not immediately respond to a “request for comment.”
(Reporting by David Shepardson in Washington and Kritika Lamba in Bengaluru; Editing by Alan Barona and Matthew Lewis)