By Kate Davidson, Georgia Wells and Michael C. Bender
China's ByteDance Ltd. would retain a majority ownership stake
in its TikTok app unit as part of a proposal being reviewed by
national-security regulators, with an eye toward settling the
high-profile deal by a deadline Sunday, according to a person
familiar with the situation.
The Committee on Foreign Investment in the U.S., known as Cfius,
which includes officials from the Treasury, State, Commerce and
other departments, reviewed the deal late Tuesday afternoon but
didn't immediately announce a recommendation.
The proposal includes Oracle Corp.'s bid to become TikTok's U.S.
technology partner as part of an effort to address the
administration's national-security concerns surrounding the
Chinese-owned video-sharing app.
The deal would make Oracle the U.S. technology partner of
TikTok, while allowing TikTok's parent company, Beijing-based
ByteDance, to retain a majority ownership stake, according to the
person familiar with the deal. TikTok's global business would also
become a company based in the U.S. that would remain a unit of
ByteDance, the person said, adding that Oracle would take a
minority stake in that company.
President Trump said at the White House on Tuesday that his
administration would make a decision on the pending deal "pretty
soon," adding that he has "high respect" for Oracle Chairman Larry
"I heard they're very close to a deal," Mr. Trump said without
Mr. Trump spoke by phone Tuesday with Oracle CEO Safra Catz
about the company's plans to revamp TikTok's U.S. operations,
according to people familiar with the matter. Ms. Catz was seen at
a White House event earlier Tuesday in which the president touted a
Middle East peace agreement between Israel and two Gulf
While the status of the deal with the foreign investment
committee wasn't immediately clear, it's possible that more-senior
national-security officials will give the deal an even more
thorough evaluation, said Aimen Mir, a former Treasury official who
helped run the panel's investigation process from 2008 to 2018.
Approval on deals of high public interest or ones with
market-moving implications, complex policy questions or diplomatic
issues are often decided at separate meeting of officials who are
Senate-confirmed or above in status, said Mr. Mir, who advises
companies undergoing reviews as a lawyer at Freshfields Bruckhaus
Deringer LLP in Washington, D.C. Mr. Mir isn't involved in the
In an August executive order, the White House effectively gave
ByteDance a 45-day deadline to sell its U.S. TikTok operations or
face a ban. The administration contends that the app poses a
security threat because the data TikTok collects from U.S.
consumers could be shared with the Chinese government. TikTok has
said it would never hand over such data.
TikTok said Monday it thinks its proposal submitted to the
Treasury Department "would resolve the Administration's security
Mr. Trump took an interest in the social-media company weeks
ago, but his involvement has lessened as his re-election campaign
has become a bigger focus.
Treasury Secretary Steven Mnuchin has been the driving force
inside the administration to find a deal that keeps TikTok in
operation in the U.S., while Mr. Trump was initially inclined to
ban the company. He agreed to let the company find a U.S.-based
buyer, saying he wanted a portion of the proceeds to end up in the
Another person familiar with the talks said Mr. Trump's concern
would be addressed by pointing to the estimated 25,000 U.S.-based
jobs the deal may create, and the amount of potential tax revenue
the new company would generate in future years.
White House officials declined to say which way Mr. Trump was
leaning on Tuesday.
But people involved in the negotiations said Oracle had as good
of a shot as any at convincing the president that it could be
trusted to address the national security concerns that have been
raised by the president, his administration and Republicans in
Peter Navarro, one of Mr. Trump's top trade advisers, has been
pushing to ban TikTok. But in an interview on Fox News on Aug. 26,
Mr. Navarro criticized Microsoft's deals in China, while praising
Oracle. "Oracle, on the other hand, has a strong reputation of
really putting a great firewall between its operations in China,"
Mr. Trump has been in regular contact during his presidency with
Oracle's Ms. Catz, and he has openly praised Mr. Ellison, one of
the few top technology executives supportive of the president.
"If Mnuchin, and Larry Ellison, and Safra can't convince the big
guy on this, no one is going to convince him," a person familiar
with the talks said.
Mr. Trump issued a separate executive order in August that
banned U.S. individuals and companies from transactions involving
WeChat, the popular Chinese app owned by Tencent Holdings Ltd. that
combines text messages, mobile payments, social media and other
The proposed ban has rattled U.S. companies doing business in
China; executives worry it could disrupt their marketing campaigns
and other operations in the world's second-largest economy.
The precise outline of the WeChat ban isn't clear, however, with
Mr. Trump directing the Commerce Department to come up with
specific details by Sunday.
In an interview last week, Secretary of Commerce Wilbur Ross
said his department would meet that deadline, publishing rules
detailing the specific transactions that would be prohibited.
Oracle shares rose 2.5% on Tuesday to close at $60.94.
Andrew Restuccia and John D. McKinnon contributed to this
Write to Kate Davidson at firstname.lastname@example.org, Georgia Wells
at Georgia.Wells@wsj.com and Michael C. Bender at
(END) Dow Jones Newswires
September 15, 2020 21:31 ET (01:31 GMT)
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