TikTok pushing forward with deal to meet looming deadline

Bloomberg

TikTok is pressing forward with plans for a sale of its US operations ahead of a mid-September deadline, according to a person familiar with the matter, even as signs emerge that the video-sharing app is facing pressure to shut down rather than make a deal.
The app, owned by China’s ByteDance Ltd., is still considering bids from two possible buyers — Oracle Corp. and Microsoft Corp., which has teamed up with Walmart Inc. TikTok intends to bring a proposal to the White House for approval before a deadline imposed by US President Donald Trump, said the person, who asked not to be identified discussing internal plans. It will then be up to the Trump administration to approve a deal.
Reuters reported that the Chinese government has privately expressed that it would rather ByteDance close TikTok in the US than be forced to sell its US assets. In response to the report, a TikTok spokesman said, “the government has never suggested to us that we should shut down TikTok in the US or any other market.”
TikTok has been at the center of deal negotiations and a political debate since early August, when Trump threatened to ban the app from the US, citing national security concerns. He then ordered it sold and has said he wants a deal by Sept. 15. Later that month, the Chinese government announced a handful of new restrictions around the sale of certain technologies, which has slowed a possible deal.
Part of the confusion around sealing any deal is the number of interested parties that TikTok’s parent company must satisfy. Not only does it have to come to agreeable terms with an acquirer, as well as its profit-seeking venture capital backers, ByteDance also must find a way to please both the Chinese and US governments.
In China, ceding a top technology asset in the middle of a contentious battle with the U.S. is seen as unpatriotic. Within the Trump administration, certain advisers are pushing for an all-out shutdown of TikTok rather than a sale to an American company.
China’s U.S. embassy referred Bloomberg to comments made Friday by Zhao Lijian, a spokesperson for the Chinese foreign ministry. “The U.S. should immediately correct its mistakes and stop its unjustifiable suppression on Chinese companies and other non-U.S. companies,” he said. “The Chinese side retains the right to take all necessary measures to safeguard the legitimate rights and interests of the Chinese companies.”
It also remains unclear which deal deadline TikTok has to abide by. The company is working toward a Sept. 20 deadline to provide something to the Trump administration, one person close to the company said, sticking with the 45-day timeline imposed in an executive order signed by Trump Aug. 6. But Trump has been insisting on a Sept. 15 deadline in media comments. TikTok also faces a November deadline to divest its U.S. assets in an order based on a recommendation from an interagency national security panel, the Committee on Foreign Investment in the U.S., or CFIUS.
The companies involved in the negotiations were focused on getting a preliminary agreement by September 20, and completing the sale by December, said one person familiar with the matter. But China’s move to assert authority over a sale upended talks, said the person, and now it’s uncertain whether that deadline can be met. Whether a deal can be struck will depend on ByteDance navigating a difficult negotiation that wins support from China and the Trump administration, said the person.