President Donald Trump has reportedly granted his personal approval of Oracle’s proposal to invest in TikTok, moving the entire saga one step closer to an end.
The president told reporters this afternoon he approved the deal “in concept,” according to Bloomberg News.
“I have given the deal my blessing,” Trump said. “I approved the deal in concept.”
Late last Sunday one-time dark horse Oracle emerged as the victor in a complex and deeply unusual bidding process for TikTok that kicked off when the White House declared the popular video-sharing app to be a national security threat.
Bloomberg reports that the transaction will leave the majority of TikTok’s assets and proprietary algorithms in the hands of parent company ByteDance, with Oracle and other US investors taking minority stakes in the newly-formed TikTok Global.
Trump first said in August that he wanted the US Treasury to receive a cut of the transaction.
“We set a date, I set a date, of around September 15th, at which point it’s going to be out of business in the United States. But if somebody, whether it’s Microsoft or somebody else, buys it, that’ll be interesting,” Trump told reporters at the time, adding:
More than anything else, I said a very substantial portion of that price is going to have to come into the Treasury of the United States. Because we’re making it possible for this deal to happen. Right now, they don’t have any rights, unless we give it to them. So if we’re going to give them the rights, then it has to come into, it has to come into this country. … “So it’ll close down on September 15th, unless Microsoft or somebody else is able to buy it, and work out a deal, an appropriate deal, so the Treasury of the— really the Treasury, I suppose you would say, of the United States, gets a lot of money. A lot of money/
The federal government does not generally receive a commission or cut of any merger or acquisition, other than any taxes that may be due, which are paid to the Treasury as required.
According to Bloomberg, the companies have agreed to donate $5 billion to an educational fund based in Texas to meet this particular term. “They’re going to be setting up a very large fund,” Trump said. “That’s their contribution that I’ve been asking for.”
The deal still requires approval from the Treasury department and from Chinese authorities before it can move forward. It is as yet unclear whether Trump’s “blessing” is sufficient to prevent TikTok from being kicked out of Apple and Google’s mobile app stores tomorrow night.
Update, 7:42pm: After Ars first published our story, TikTok issued a statement confirming a few high-level details about the deal.
“We are pleased that the proposal by TikTok, Oracle, and Walmart will reserve the security concerns of the US Administration and settle questions around TikTok’s future in the US,” the company wrote.
Oracle will “become our trusted technology provider, responsible for hosting all US user data and securing associated computer systems,” TikTok added. “Both companies will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company.”