ByteDance’s Largest US Investors ‘In Talks’ Over TikTok Deal

The largest US investors in TikTok parent ByteDance are reportedly considering taking stakes in a spin-off of the app’s US operations in a deal to prevent the social media app from shutting down in the country under a law passed last year.

General Atlantic, Susquehanna, KKR and Coatue, all existing ByteDance investors, are involved in the talks, according to reports by the Financial Times, Reuters and other news agencies, which cited unnamed sources.

Susquehanna International Group and General Atlantic are represented on the board of directors of Beijing-based ByteDance and are leading the discussions, Reuters reported.

Negotiations

Oracle may also take a small stake in the spin-off and would reportedly continue a 2020 deal under which it houses TikTok’s US data in Texas facilities.

ByteDance would seek to keep a stake in the US operation, but its ownership would be diluted to below the 20 percent threshold required by US law, the Reuters report said.

ByteDance strongly prefers this deal over others that are being considered, the FT report said.

The White House, which unusually is directly involved as an intermediary in the negotiations, has said it is in discussions with four distinct groups.

Under the deal proposed with US investors, Oracle would provide security assurances that TikTok’s US data was not accessible by the Chinese government.

Non-sale option

The deal would be designed to allow ByteDance to retain its involvement with TikTok’s US business, meaning the US spin-off could continue to use the parent company’s proprietary algorithm, for instance, rather than being spun off into a completely separate entity.

General Atlantic chief executive William Ford said in January that ByteDance was in talks with the US over a non-sale option for TikTok.

TikTok was forced by last year’s law to briefly suspend its US operations in January, before the incoming US executive administration ordered an extension of 75 days that expires on 5 April.

The social media service has some 170 million users in the US as well as a rapidly growing e-commerce operation.