TikTok Finalizes Sale of U.S. Unit to American Consortium; Oracle, Silver Lake, and MGX Each Take 15% Stake

TikTok Sells U.S. Operations to American Investors, Resolving National Security Dispute

TikTok has finalized an agreement to sell its U.S. operations to a joint venture controlled by American investors, according to a memo released on Tuesday. The deal concludes a multi-year effort by U.S. regulators to force the Chinese parent company, ByteDance, to divest its highly popular social video platform over national security concerns.

The core of the agreement involves a consortium of American investors—including technology giant Oracle, private equity firm Silver Lake, and MGX—taking a significant ownership stake. The new joint venture established for the U.S. business will be 50% held by this consortium of new investors.

The new TikTok U.S. joint venture will be 50% held by a consortium of new investors, including Oracle, Silver Lake and MGX with 15% each. Another 30.1% will be held by other investors.

The most material data point confirming the structure shows that Oracle, Silver Lake, and MGX will each acquire a 15% stake in the U.S. entity. This structure ensures that the platform's management and data security protocols will be overseen by American entities, addressing the primary concerns raised by U.S. officials regarding data access and influence from foreign governments.

Deal Structure and Ownership Breakdown

The finalized sale structure represents a significant shift in control for one of the world's fastest-growing social media platforms. The ownership percentages detailed in the memo highlight the commitment to American control:

• The primary consortium (Oracle, Silver Lake, MGX) collectively holds 45% (15% each).
• The consortium's total holding, including other unnamed members, accounts for 50% of the new U.S. joint venture.
• An additional 30.1% stake will be held by other investors, whose identities were not immediately specified in the reports.

This arrangement effectively ends the years-long battle that has shadowed TikTok's operations in the United States, which has been a key market for the platform’s explosive growth. The pressure on ByteDance to divest began due to fears that user data could be accessed by the Chinese government, a concern the company has repeatedly sought to alleviate.

Market Implications and Timeline

The agreement to sell the U.S. unit to American investors is expected to stabilize the platform's regulatory environment and allow it to focus on its core business model. For Oracle, the acquisition of a 15% stake solidifies its role in the cloud and data management aspects of the platform, potentially leveraging its enterprise technology expertise to secure the U.S. user data.

The deal is set to officially close on January 22. This closing date marks the formal conclusion of efforts to force ByteDance to divest its U.S. business, a resolution that has been sought through various regulatory and executive actions over the past few years.

The involvement of prominent American investors like Silver Lake and Oracle signals confidence in the long-term viability and profitability of the U.S. business, despite the regulatory hurdles it has faced. The finalized sale ensures that the popular social video platform will be managed under a structure designed to meet stringent national security requirements.