TikTok has finally agreed to a US sale

The TikTok ban saga ends with a US-led acquisition set to close January 22

by · TechSpot

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Recap: The five-year saga that threatened to block US users from one of the country's most popular social media apps appears to be coming to a close. After the US and Chinese governments approved details of an agreement for China-based ByteDance to divest TikTok to US entities, the social media company has accepted the terms.

In a memo obtained by media outlets, TikTok CEO Shou Zi Chew informed employees that the company has signed a deal to be acquired by a group of American investors. The agreement is scheduled to close on January 22.

Chew confirmed that TikTok has agreed to terms negotiated earlier this year, following a multiyear ordeal during which the US attempted to ban the app. Politicians feared that TikTok, which is popular with young Americans, sends user data to its Chinese owner, ByteDance.

President Donald Trump signed an executive order in 2020, during his first administration, forcing ByteDance to sell TikTok to a US owner. Last year, then-President Joe Biden signed a law giving the app until January 20 to find a buyer. However, soon after beginning his second term, Trump extended the deadline three times, signaling a reversal of his position on the social media platform.

In September and October, the US and China approved a deal under which ByteDance will reduce its TikTok stake to 20%. Between 40 and 50% will go to a coalition led by Oracle, private equity firm Silver Lake, and Emirati investment company MGX. ByteDance investors, including Susquehanna International Group, General Atlantic, and KKR, will retain 30%.

Other investors include Dell founder Michael Dell and Fox's Rupert Murdoch. President Trump approved the agreement through a September executive order that included a fourth and final 120-day extension to January 20.

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Chew's memo explained that the top three investors will be responsible for TikTok's data, including content moderation and its highly valued algorithm. How the new owners will manage the software differently from ByteDance remains unclear.

Oracle will also audit and validate TikTok's compliance with the agreement, as its servers will store the app's US user data. In addition, the US investors will oversee global interoperability, e-commerce, advertising, and marketing.

Around 43% of US adults under 30 recently told the Pew Research Center that they regularly receive news from TikTok – more than from any other social media platform.