Monday 14 September 2020 3:56 pm

Oracle confirms Tiktok deal as US officials step in for review

Oracle has confirmed it is part of a deal to sign a partnership agreement with hit video app Tiktok, after its Chinese owner Bytedance rejected a rival takeover bid from Microsoft.

Bytedance had been exploring a sale of its US business after US President Donald Trump threatened to shut down the app amid concerns about national security.

Oracle and Microsoft had been frontrunners of two separate consortiums in a bidding war for the social media platform. But Microsoft yesterday announced that Bytedance had rejected its offer, putting Oracle in prime position to seal a deal.

Read more: Crystal ball: Here’s what the Oracle deal could mean for Tiktok

The US tech group, which is chaired by billionaire Larry Ellison, has now submitted a proposal to partner with Bytedance, which is being reviewed by US officials.

The tie-up would see Oracle take over management of Tiktok’s US user data. The two sides are also said to be negotiating the sale of a stake in Tiktok’s US division.

US Treasury secretary Steve Mnuchin said the Committee on Foreign Investment — a US panel set up to scrutinise such deals — would be reviewing the agreement this week, before deciding whether or not to recommend the deal to the president.

Some of Bytedance’s biggest backers, including investment firms General Atlantic and Sequoia, will also be given minority stakes in the app’s US arm, according to reports.

It is thought the deal would allow Bytedance to avoid a US ban while appeasing Washington’s concerns about national security.

Read more: Tiktok boss Kevin Mayer quits over looming Trump ban

Trump has previously supported Oracle’s bid for Tiktok, saying it would be a “great company” to take over the Chinese platform.

Oracle founder Larry Ellison is a vocal supporter of Trump and earlier this year hosted a fundraiser for the president at his estate in California.

Tiktok has become a high-profile victim of ongoing trade tensions between the US and China.

Tiktok chief executive Kevin Mayer resigned after just three months in the job, stating that political pressure from the White House had changed the nature of his role.

Tiktok and Oracle declined to comment.