2nd April 2023

Microsoft continues negotiations to buy TikTok

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Anna Savelieva

The company has confirmed its plans and wants to complete the discussion by September 15, 2020. The already tense relations between the US and China are deteriorating, complicating negotiations and turning TikTok into a kind of “last straw of patience.”

The official statement said that following a conversation between Microsoft CEO Satya Nadella and President Donald Trump, Microsoft is ready to continue exploring the possibility of acquiring TikTok in the United States. The company understands the president’s concerns — a key prerequisite will be a security overhaul and “providing appropriate US economic benefits.” Microsoft also intends to control that from now on, the data of American users will be stored only in America and removed from foreign servers outside the country.

The Committee on Foreign Investment in the United States (CFIUS) has received notice of preliminary negotiations between ByteDance (parent company of TikTok) and Microsoft regarding purchases not only in the States, but also in Australia, Canada and New Zealand. However, the buyer can offer a minority stake in the business to other investors.

The company additionally stressed that the discussions are preliminary and do not carry any guarantees that the transaction will continue.

Despite the fact that Microsoft already owns LinkedIn, the company faced fewer regulatory hurdles at the time of the purchase negotiations than its direct competitors in this matter. One of them is FaceBook, which ByteDance has already accused of plagiarism and defamation regarding the censorship of political protests.

Recall that last week, President Donald Trump announced his intention to sign on Saturday, August 1, an executive order banning TikTok in the United States. Such a move will be a major blow to ByteDance and will demonstrate how much the country really cares about national security regarding personal data. It is not yet clear which authority will be responsible for the ban, how the restrictions will be applied, and what legal challenges will have to be faced.

See also  Microsoft officially announced its intention to buy TikTok for the first time, and the head of the company Satya Nadella discussed a potential deal with Trump

Earlier, the US Senate Committee on Homeland Security and Government Affairs voted to ban federal employees from downloading TikTok on government-issued devices as part of a defense policy bill. The House of Representatives supported this measure.

ByteDance is considering several options for the future of TikTok. The company recently received an offer from investors including Sequoia and General Atlantic to transfer a majority stake to them. The app is valued at around $ 50 billion, but some ByteDance executives believe TikTok is worth more.

Also, ByteDance insistently wanted to retain a minority stake, which would complicate negotiations, but, after the announcement of the application ban in the United States, the company chose to abandon this condition. The decision was supported by several Republican senators – John Cornin from Texas and Roger Vicker, who heads the Committee on Commerce. Treasury Secretary Steven Mnuchin also spoke in favor and added that “TikTok cannot stay in the current format.”

About 70% of ByteDance’s external investors are from the United States. Some of them may be given the opportunity to purchase minority stakes.

Mergers and acquisitions, information security


Vicky O. Torres

My name is Vicky O. Torres. I am a psychologist by profession, and I love my work very much. And in general, I am an active seeker of truth, silence and beauty of the world.

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