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The White House is fighting over US investors’ deals to buy Tiktok’s American business, fighting over the management of popular video apps from Chinese owners.
Under the terms of the transaction, a new group of outside investors, including Andreessen Horowitz, Blackstone, Silver Lake and other large private capital companies, owns about half of Tiktok’s US operations, according to several people familiar with the issue. These people said that US units will be spun from Beijing-based parent mammary.
Large existing investors in Tiktok, including Atlantic General, Susquehanna, KKR, and Kote, will also take stakes in the US sector, which accounts for around 30% of the business.
The plan, which is still in preliminary stages and may still change depending on those involved in the process, is ahead of the deadline for American law on April 5, unless the Beijing-based owner sells it to non-Chinese entities.
President Donald Trump officials are scheduled to meet Wednesday to discuss negotiations, and if the president gives him his blessing, the deal could be announced imminently, people said.
“If there’s an announcement about Tiktok, it’s going to come from President Trump,” a White House spokesman said.
Tiktok did not immediately respond to requests for comment. Andreessen Horowitz, Blackstone and General Atlantic declined to comment, while Coatue, Silver Lake and KKR did not respond immediately.
The deal must be approved by Trump, Baitedan and the Chinese government. This has eased the attitude that previously threatened to block transactions. Some warned that the situation is fluid and that it is still possible that the White House could suddenly change its plans.
The ordinance holds less than 20% of the business under the terms of the transaction to meet the requirements of US laws that say it is under the control of a “foreign enemy.”
This plan will require months of further diligence, structured and other company financing commitment, typical of a regular acquisition transaction. One said it would take three to four months for the group to complete the spin-off process.
The Oracle, co-founded by Trump’s ally Larry Ellison, will secure Tiktok’s US data as part of the deal, people said.
However, one point of one conflict that controls Tiktok’s highly popular algorithm remains, several people said. One option under discussion is for Baitedan to continue to develop and operate algorithms, a central demand for the Chinese government. Meanwhile, the new US group is to access it through licensing agreements and oversee changes.
However, some analysts argue that the algorithm must be fully operated by US companies to meet legal requirements.
Separately, Jeff Bezos’ Amazon had placed an 11-hour bid to buy Tiktok’s US business, according to several people familiar with the issues first reported by the New York Times. But bids from existing investors remained at the forefront, several people said.
Additional reports by George Hammond and Lafay Wudin of San Francisco, Harriet Agnew of London, Jijin Woo of Hong Kong, and Alex Rogers of Washington
