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TikTok to team up with Oracle as Microsoft loses acquisition race

Proactive Investors Monday, 14 September 2020
Microsoft Corporation (NASDAQ:MSFT) said it has lost out in the race to buy TikTok, with reports that Oracle Corporation (NYSE:ORCL) has been chosen by the social media app’s Chinese parent company.  Instead of selling TikTok’s US operations, Beijing-based ByteDance has selected Oracle as its US-based business partner. Oracle will be "trusted tech partner" of the app in the US and may buy a large stake in the dance-focused app, according to reports stateside. Either way, the deal is expected to have to be signed off by the White House after President Trump said the app poses a threat to national security and issued an executive order calling for TikTok to sell its US operations or else it would be blocked in the country.   Confirmation of the Oracle deal has not yet been confirmed by either the US or Chinese companies, nor in Washington.  Microsoft issued a statement overnight, saying, “ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.” The trillion-dollar company confirmed in August that it was in talks to acquire TikTok’s businesses in US, Canada, Australia and New Zealand, with reports from the FT suggesting it could snaffle the entire TikTok’s operation. In Sunday's statement, the Redmond, Washington-based software colossus referenced the “significant changes” it had proposed last month, notably adding security, privacy, and digital safety protections to Tiktok’s service, adding: “We look forward to seeing how the service evolves in these important areas.” Analysts at US broker Wedbush said they believe Microsoft would only buy TikTok with its core algorithm, on which point the Chinese government and ByteDance were not willing to budge. “Given the need now to get a green light from Beijing after its export rules were changed a few weeks ago, TikTok's days in the US likely are numbered with a shutdown now the next step,” the analysts said. “While Oracle is technically the remaining bidder, without willing to sell its core algorithm we see no TikTok sale on the horizon heading into the September 15 deadline. “Oracle could be a technology partner, but a sale/divestiture of the US operations for TikTok remains the focus. Unless some last minute changes, ByteDance heads into the White House deadline this week with some dark days ahead as the plug now likely gets pulled on the TikTok app within the US.”
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News video: TikTok Reaches Deal With Oracle Instead of Microsoft

TikTok Reaches Deal With Oracle Instead of Microsoft 01:05

According to NBC News, Oracle confirmed the new deal on Monday.

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