The Abu Dhabi royal family plans to invest in TikTok’s US operations following Donald Trump’s signing of an executive order facilitating a deal valued at $14 billion (£10.5 billion).
MGX, a fund led by Sheikh Tahnoon Bin Zayed Al Nahyan, is set to acquire a 15% stake and representation on the board once TikTok US is spun out.
Late Thursday night, the US president signed an executive order that sanctioned the agreement and provided a 120-day period to finalize the details.
Larry Ellison’s Oracle, Private Equity Group Silver Lake, and Abu Dhabi’s MGX will together hold approximately 45% of TikTok’s shares. Overall, American firms are anticipated to control around 65% of the company, with Trump also mentioning tech moguls Michael Dell and Rupert Murdoch as participating investors.
According to Trump, “[TikTok US] will primarily be owned and governed by Americans, removing control from foreign adversaries. Notably, Larry Ellison, a major investor, will ensure that it operates seamlessly within the US.”
ByteDance, TikTok’s Chinese parent company, retains a 19.9% stake in the US operations.
While China has not publicly commented on the approval of the agreement, Trump stated he had a “productive conversation” with Chinese President Xi Jinping, who “seemed positive about the situation.”
US Vice President JD Vance confirmed that the TikTok deal is valued at $14 billion, noting some resistance from the Chinese side. “Our primary goal was to continue TikTok’s operations while safeguarding American data privacy in compliance with the law,” Vance remarked.
He further stated, “This agreement ensures that Americans can engage with TikTok, but with greater confidence than before, as their data will be secure and won’t be weaponized against them.”
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The $14 billion valuation of TikTok’s US operations is significantly lower than its total valuation; which is estimated at around $330 billion. In comparison, Meta, the parent company of Facebook and Instagram, is valued at $1.8 trillion.
The future of TikTok in America has been uncertain since last April when Congress enacted legislation mandating a sale due to privacy and national security issues. Trump has consistently extended the deadline for concluding a sale or considering TikTok’s closure while attempting to facilitate the transaction.
Source: www.theguardian.com
