Sound the alarm

16 Sep 2020 By Gina Chon Follow @GinaChon

The ByteDance unit hopes to avoid a sale by partnering with Oracle. It hardly amounts to the clean break Donald Trump demanded. The politicking muddies the already challenging process for investments with foreign involvement. It makes cross-border deals that much more difficult.

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China’s ByteDance has submitted a proposal to a U.S. government panel that includes Oracle as the “trusted technology provider” for its video app unit, TikTok, Oracle said on Sept. 14. U.S. Treasury Secretary Steven Mnuchin told CNBC the deal also includes creating a company with headquarters in the United States and the creation of 20,000 jobs. The deal, which stops short of a full sale of TikTok U.S. assets, needs the approval of the Committee on Foreign Investment in the United States and the Chinese government. Six Republican senators on Sept. 16 sent a letter to U.S. President Donald Trump urging him to reject the plan.

In August, Trump issued executive orders banning transactions with TikTok and requiring ByteDance to divest of TikTok’s U.S. business, citing national security risks. Microsoft and Oracle were among the interested suitors. ByteDance informed Microsoft it would not be selling TikTok’s U.S. operations to the firm, Microsoft said on Sept. 13.

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