ByteDance's deal with U.S. investors includes a hefty transaction fee amid security concerns.
U.S. Slated to Receive $10 Billion Fee in TikTok Sale Deal
The United States is expected to receive about $10 billion from investors as part of the completed deal for ByteDance to sell the American operations of the social video app TikTok to a consortium of U.S. investors, according to The Wall Street Journal.
The payment, described as a transaction fee tied to the government’s role in brokering the deal, would be paid by investors including Oracle, Silver Lake, and Abu Dhabi based MGX. About $2.5 billion has already been paid to the U.S. Treasury, with additional installments expected to bring the total to roughly $10 billion.
The deal created a new majority American owned company, often called TikTok USDS Joint Venture LLC, which will run the platform’s U.S. business and oversee data protection and security. The restructuring followed pressure from Washington over national security concerns tied to Chinese ownership.
Under the arrangement, ByteDance keeps a minority stake and licenses TikTok’s recommendation algorithm to the new entity, allowing the app, used by more than 200 million Americans, to avoid a potential U.S. ban.
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