China’s ByteDance says TikTok’s will be its subsidiary

Amid tense trade ties between Washington and Beijing, China’s ByteDance has said that TikTok’s global business will become its subsidiary. Oracle Corp and Walmart Inc recently said they and US investors would own the majority of the video app following a deal with President Trump’s administration.

The fate of the video app, which is owned by China’s ByteDance, looks uncertain. In recent weeks, US government officials have claimed that TikTok poses a serious threat to national security, and President Donald Trump has threatened to ban it unless an American company takes control of its domestic operations.

Trump signed an executive order on August 14 giving ByteDance 90 days to sell TikTok. The order came amid concerns that the personal data of as many as 100 million Americans using the app could be passed on to China’s Communist Party government.

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On Saturday, Trump said he supported a deal in principle that would allow TikTok to continue to operate in the United States. Over the weekend, The US President approved a deal from Oracle just hours before a ban on downloads was due to kick off.

Under the deal, TikTok will set up its headquarters in the United States, creating 25,000 jobs. Oracle would store TikTok data on its cloud platform, while Walmart would be involved as a commercial partner.

Trump said he approved the deal “in concept.”

ByteDance said on Monday that it will own 80% of TikTok Global, a newly created US company that will own most of the app’s operations worldwide. Oracle and Walmart, which have agreed to take stakes in TikTok Global of 12.5% and 7.5% respectively, had said on Saturday that majority ownership of TikTok would be in American hands.

Related news: Tik Tok deal with Oracle mired in uncertainty as US deadline looms

ByteDance in its statement on Monday said it was a “rumor” that US investors would be TikTok Global’s majority owners and that ByteDance would lose control over TikTok. Oracle has declined to comment on ByteDance’s statement, while Walmart did not respond to a request for comment, Reuters reported.

Some sources close to the deal have sought to reconcile the discrepancy by pointing out that 41% of ByteDance is owned by US investors, so by counting this indirect ownership, TikTok Global would be majority-owned by US parties. One of the sources said the deal with Oracle and Walmart values TikTok Global at more than $50 billion.

ByteDance also said a $5 billion payment of taxes TikTok Global is reportedly supposed to make to the US Treasury is based on estimated income and other taxes the company will need to pay over the next few years, and has nothing to do with the deal reached with Oracle and Walmart.