The TikTok acquisition is heating up in leaps and bounds as days go by! In a surprise development, Walmart has entered the race as well. But, it is not as a third contender!
The American retail giant, instead of bidding on TikTok as a standalone buyer, has been in talks with Microsoft to bid for Tiktok’s U.S operations as a duo! Thus, this currently leaves only Oracle as the free-standing buyer in TikTok acquisition race.
The sources who shared this news under the condition of anonymity mentioned that, as of now, the discussions are going very fluid. However, it is still very much unclear which contender is more likely to secure a deal.
They also said that ByteDance, the Chinese-origin company which currently owns TikTok, has been reported to be making a concrete decision on the basis of the competing bids in the coming days. Nonetheless, whichever bid they choose to proceed with will set TikTok’s U.S business in a very different path.
For instance, if ByteDance decides to go with the Microsoft-Walmart duo then TikTok could probably ride on the wave of the robust digital sales background of Walmart. That will then turn the app into some sort of an eCommerce app for both creators and users which would make it very close to its Chinese lookalike Douyin.
On the other hand, if ByteDance decided to sell TikTok to Larry Ellison headed enterprise software company Oracle then TikTok’s main utility would be in terms of data. As mentioned earlier, Oracle can very easily leverage all the information TikTok has gathered from the in-app social interactions to benefit their various products in the marketing.
Currently, there has been no comment on the deal proceedings from any of the representatives of TikTok, Microsoft and Oracle. But Walmart, in a statement regarding the same, has confirmed this particular news.
One of their spokespeople said that Walmart is very confident when it comes to their partnership with Microsoft and that they both will certainly meet the expectations of TikTok users in the US while simultaneously addressing the concerns of U.S. government regulators as well.
Now, for TikTok, any deal that they decide to go with at their earliest will end the months of extreme turbulence and backlash they have been facing from the Trump administration.
It is well known by this point in time that a majority of White House officials have become increasingly tough on their dealings with China. It is the belief of the Trump administration that TikTok, while it is still under the ownership of ByteDance, could have been providing data about U.S. users to Beijing. Thus, have lately been referring to TikTok as a national security threat.
Earlier this month, President Trump also signed an executive order which mandated that TikTok has to sell its U.S. operations latest by mid-September. If they fail to do so then they will cease transactions within the country.
This is what is now driving ByteDance to seek a buyer as fast as they can. Microsoft had already been in talks with them about a potential acquisition. They initially discussed Microsoft taking just a minority stake in TikTok but the scope of a deal increased very quickly.
ByteDance, under the conditions that have been set forth by the White House to eliminate national security concerns, would need to completely sell of TikTok’s U.S. operations to reduce the app’s Chinese ownership.
The Chinese-origin parent company will also be required to sell to one or more companies that have a technology services provider. This will help in the transference of TikTok’s American user data to U.S. servers.
The potential deal size is currently ranging from anywhere between $20 billion to $50 billion with the bid amounts that have been submitted by the buyers still remaining anonymous.
Here it needs to be noted that Microsoft is currently by far the largest potential acquirer with the deepest resources as they have $137 billion in cash and wield a market value of more than $1.7 trillion. Oracle, with a market value of $175 billion and having $43 billion in cash and short-term investments is close by as well.
Now it remains to be seen which one of them can bag the highly sought about short video app in the near future. We will keep you updated. Until then, stay tuned.