TikTok's Chinese owner, ByteDance, signed binding agreements with three major investors to sell just over 80% of the company's US assets to American and global investors to avoid a US government ban, TikTok CEO Shou Zi Chew told employees on Thursday.
The deal is a major step toward resolving years of uncertainty about the short video app's future in the United States since August 2020, when then President Donald Trump first tried unsuccessfully to ban the app that is now used regularly by more than 170 million Americans.
The details of the deal are in line with one unveiled in September, when Trump delayed until January 20 enforcement of the law that bans the app unless its Chinese owners sell it amid efforts to extract TikTok's US assets from the global platform. He also declared that the deal met the terms of the divestiture requirements.
The company told employees on Thursday that ByteDance and TikTok signed binding agreements with three managing investors: Oracle, Silver Lake and MGX, to form a new TikTok US joint venture named TikTok USDS Joint Venture LLC.
Oracle declined to comment. The White House referred questions to TikTok. TikTok said in the memo that the deal will enable "over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community. "
The deal, set to close on January 22, would end years of efforts to force ByteDance to divest its US business over national security concerns.
Oracle, Silver Lake and Abu Dhabi-based MGX will collectively own 45% of the new entity, according to the memo, which confirms what Reuters and other outlets reported in September.
The US joint venture will be 50% held by a consortium of new investors, including Oracle, Silver Lake and MGX with 15% each; 30.1% held by affiliates of certain existing investors of ByteDance; and 19.9% will be retained by ByteDance, the memo said.
ByteDance did not immediately respond to a request for comment.
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