You know a deal is signed and going to close when the parties keep fact checking each other and no one can agree on what the deal actually says.
We’ve been following the TikTok / Oracle deal for sometime here on TechCrunch, and over the weekend, it seemed like we finally got to the finish line of one of the strangest M&A processes we’ve seen. But the last 48 hours have made everything so confused, I am not sure we even know what the deal is despite it being approved.
Overnight, my colleague Rita Liao put together a nice fact check on what we know now about the TikTok deal, based on ByteDance’s official statements. The key is that “China’s ByteDance confirms it will retain an 80% stake in TikTok after selling a total of 20% to Oracle, its ‘trusted technology partner,’ and Walmart, its ‘commercial partner.’”
That’s been our assumption, that Oracle is taking 12.5% in TikTok Global, and Walmart will take 7.5%. The deal terms would value TikTok at about $60 billion by some estimates.
That’s a simple story, but apparently not the full one, because now there is another wrinkle happening here.
In a new statement attributed to its executive vice president Ken Glueck, Oracle said that “Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.”
President Donald Trump has spoken out about the deal himself in places like CNBC, arguing that TikTok must be completely controlled by Americans.
From what I can glean (and to be honest, given the shifting landscape and war of words, it’s not clear that even the participants know what is going on), “TikTok” the app is going to be housed in a new company called TikTok Global, that will be located outside of China proper. There appears to be no other “TikTok” entity. ByteDance will continue to own its China-centric apps Douyin (which also is a short video social service targeting the Chinese market), Toutiao, and others and obviously keep running them.
So how can a company simultaneously own a majority of the company and 0% of a company? TechCrunch is investigating, or at least, combing through the rubble of this deal and trying to make heads or tails of it.