TikTok Secures U.S. Deal: Oracle, Silver Lake Lead Majority Ownership
TikTok's U.S. operations have secured a deal, following President Biden's signing of the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA). The legislation required TikTok to separate from its Chinese parent company, ByteDance, to avoid a nationwide ban. The deal, approved by President Biden, sees TikTok U.S. majority-owned by a group of American investors led by Oracle and Silver Lake.
The new ownership structure will see ByteDance's stake in TikTok U.S. reduced to less than 20%. This move complies with the federal law aimed at preventing foreign adversaries from controlling U.S. technology. The main investors in TikTok U.S. will be Oracle and the private equity firm Silver Lake, collectively holding about 45% of the shares. They lead an investor group expected to hold around 50%, with ByteDance's existing shareholders retaining about 30%.
President Trump initially signed an executive order in 2020 allowing a deal for TikTok's U.S. operations to proceed. However, the process was halted due to legal challenges. Last year, President Biden signed legislation requiring TikTok's assets to be sold to an American company by early this year to avoid a nationwide ban. The PAFACA act requires apps like TikTok to be restricted in the U.S. unless they're divested from ownership subject to control by adversarial foreign governments.
With the deal now finalized, TikTok U.S. will operate independently from ByteDance, ensuring compliance with federal law. The new ownership structure, led by Oracle and Silver Lake, aims to address national security concerns while allowing the popular app to continue operating in the U.S.
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