Walmart Inc said it was joining Microsoft in a bid for social media firm TikTok’s US assets, showing its plans hours following the app company’s CEO said he would resign.
CEO Kevin Mayer, a high-profile former Disney executive, is leaving three months after joining TikTok, in the middle of negotiations to sell the Chinese-owned short-form video app’s US operations to Microsoft Corp or Oracle Corp.
TikTok owner ByteDance intends to enter exclusive talks with a bidder in the next 24 to 48 hours and ink a deal by the 15th of September deadline, individuals familiar with the matter told our partner news agency, Reuters.
ByteDance declined to comment.
The sale of TikTok is occurring as the company is under fire from the administration of US President Donald Trump as a potential national security risk due to the huge quantity of private data the program is compiling on US consumers.
The Trump government has demanded that China’s ByteDance, which owns TikTok globally, sell its US operations. Earlier this week, TikTok also sued over an executive order effectively banning it in the United States.
Retailer Walmart lauded TikTok’s integration of e-commerce and advertising capabilities in other markets and stated that a three-way partnership could bring that integration to the United States. The deal would help Walmart reach customers across physical and virtual sales channels and grow its online market and its marketing business. Shares of Walmart climbed 6%.
“We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators,” Walmart said in a statement.
Mayer was Walt Disney Co’s top streaming executive before becoming CEO of TikTok and COO of parent ByteDance on the 1st of June.
ByteDance founder and Chief Executive Zhang Yiming said in a different letter that the company was “moving quickly to find resolutions to the issues that we face globally, particularly in the US and India”.
He said Mayer had joined as the company was “entering arguably our most challenging moment.”
“It is never easy to come into a leadership position in a company moving as quickly as we are, and the circumstances following his arrival made it all the more complex,” Zhang said.
US, INDIA CHALLENGES
Amid growing distrust between Washington and Beijing, President Trump complained that TikTok was a national security threat and could share information regarding consumers with China’s government.
Trump issued an executive order prohibiting US transactions with TikTok on the 6th of August, effective in mid-September. He issued a separate order about a week later giving ByteDance 90 days to divest of TikTok’s US operations and information.
ByteDance has been in talks to sell TikTok’s North American, Australian and New Zealand operations which could be worth $25 billion to $30 billion, individuals with knowledge of the matter have said.
The business has also been targeted at India, where TikTok was among 59 Chinese apps banned by the Indian government in June after a border clash between India and China.
That month, Mayer wrote to India’s government stating China’s government has never requested user information, nor would TikTok turn it over if asked.
The influential tech news website TechCrunch reported earlier this month which ByteDance was in talks with India’s Reliance for investment in TikTok.
TikTok has become a global sensation since ByteDance launched the program in 2017, with operations in countries such as France, South Korea, Indonesia, Russia and Brazil. In April, the app hit 2 billion downloads worldwide.
Mayer was scheduled to depart TikTok as part of the planned sale, as the global role he was hired for could no longer exist, according to a person familiar with the issue.
Zhang has been the key person in TikTok sale talks, said two people with knowledge of the issue.
TikTok’s decision to launch a $200 million “creator fund” in July was spearheaded by TikTok’s former head Alex Zhu, though Mayer was also directly involved, said two of the people. The project was initiated much earlier than Mayer’s arrival, one of the people said.
“Whether TikTok reaches an agreement to sell its US business or decides to duke it out in the courts, the role for Mayer will not be anything like that he had envisioned when he joined,” said Mark Natkin, managing director of Marbridge Consulting in Beijing.
Mayer’s departure isn’t a wonderful boost for company morale at this time, Natkin said.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Yingzhi Yang in Beijing, Kanishka Singh in Bengaluru and Katie Paul in San Francisco and Echo Wang in New York. Writing by Brenda Goh, Peter Henderson and Joshua Franklin. Editing by Anil D’Silva, Christopher Cushing and Lisa Shumaker.
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