Microsoft’s role in the sale of the US division of TikTok has been mainly rumor, but last week Microsoft released a statement which for the first time confirmed their intent to purchase the company.
Microsoft’s plan is to acquire TikTik’s operations in he United States, Canada, Australia, and New Zealand,“Microsoft will move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020.
During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President,” Microsoft said in a statement. You can read Microsoft’s full response here.
Today, FT reported that Microsoft is now exploring options to buy TikTok’s entire global business which includes India and Europe. It is important to note that TikTok is not operating in China. To acquire entire TikTok business, Microsoft may need to pay around $50 billion, which is a huge amount of money.
“Microsoft had been attracted to the idea of buying all of TikTok’s global business by the difficulty of separating back-office functions such as HR and to ensure that TikTok users in one country could still use the app if they travelled to another,” a person close to ByteDance’s Asia-Pacific operations told FT.
Other new info from FT’s report:
- Discussions involve number of stakeholders, including governments and minority shareholders in ByteDance.
- Microsoft has discussed about an agreement whereby it would have one year to separate TikTok from its Chinese parent and address US government’s security concerns.
- People feel one year timeframe would be difficult to meet, it would take several years to separate the app from Chinese software.
- ByteDance is also discussing with Microsoft for TikTok India sale separately. If no deal is reached, ByteDance may sell the India unit to foreign investors or Indian buyers.
Recently, US President Donald Trump said that TikTok will be banned in the US if not sold to Microsoft or another acceptable company by September 15. He also mentioned that the U.S. Treasury Department would need to receive a lot of money in return for the deal. We are not sure what he exactly meant by this statement.