Trump to Outline TikTok Deal Proposal, With ByteDance Retaining Stake
President Donald Trump plans to announce later on Wednesday his plan for a new company called TikTok America, part of his efforts to broker a deal to keep TikTok alive in the U.S., according to a person close to the discussions.
It’s unclear whether the Trump administration has approval for the proposed structure from the Chinese government. Under Trump’s proposal, TikTok America would be roughly 50% owned by new U.S. investors and license TikTok’s algorithm from ByteDance, the person said. Existing investors in ByteDance would have a roughly one-third stake in the new company, while ByteDance would retain a 19.9% stake.
The Takeaway
The proposed structure would put ByteDance’s TikTok ownership just under the 20% limit required by a U.S. sell-or-ban law passed last year.
That structure would put ByteDance’s ownership just under the 20% threshold required in the U.S. law passed last year requiring TikTok to sever ties with its parent company or face a ban. With the new structure, Trump could deem a qualified divesture has happened under the law, which was passed by Congress last year and upheld by the Supreme Court.
The White House and TikTok did not immediately respond to requests for comment.
The planned announcement comes ahead of a Saturday deadline, which Trump set to delay enforcement of the divest-or-ban law. The Trump administration is expected to spell out a timeframe of roughly 90 to 120 days from Wednesday to finalize a deal, the person said. The proposed new company name is not finalized and could change, the person said.
It’s unclear which new investors will participate in the deal. In recent days, media outlets have reported that Andreessen Horowitz and private equity firm Blackstone have mulled taking a stake. Amazon also submitted a last-minute bid to acquire TikTok’s U.S. operations, according to a person familiar with the bid, though parties involved in the TikTok sale talks do not appear to be taking Amazon’s bid seriously. The New York Times earlier on Wednesday reported Amazon’s interest.