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TikTok’s Oracle deal go-ahead likely to be a ‘close call’ ahead of Trump deadline, say analysts

  • Unlike the outright sale of TikTok that Trump wanted, the deal would make Oracle a ‘trusted technology provider,’ Oracle confirmed on Monday
  • Even if Trump approves the deal, the Chinese government could intervene at any time, says one analyst

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Instead of facing prospects of a forced sale or shutdown in the US, TikTok now gets Oracle as a technology partner. Photo: Xinhua

TikTok’s proposed partnership with Oracle could open the door for the Chinese video app to realise its global ambitions but analysts have mixed views on whether the deal is likely to be approved by the US government.

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US President Donald Trump said on Tuesday that both companies “are very close to a deal,” adding that he was a fan of Oracle’s chairman Larry Ellison, who earlier this year held a fundraiser for the Trump campaign.

The success of the deal depends on a number of factors, including Oracle’s government relations, how it manages the post-deal relationship between TikTok and its Chinese owner ByteDance, as well as Beijing’s own thinking, analysts said.

Unlike the outright sale of TikTok that Trump wanted, the deal would make Oracle a “trusted technology provider,” Oracle confirmed on Monday. It would take over the management of TikTok’s user data in the US, Reuters reported.

Under the proposal, ByteDance would transfer TikTok‘s global business operations to a new US-headquartered company with Oracle as a minority shareholder, the Financial Times reported, citing sources. Other US investors would own a minority stake while ByteDance would be the majority shareholder of the new entity, the report said.

“It would be unusual for something this complicated to be handled in one meeting, and Oracle being a ‘trusted technology partner’ does not appear to constitute the separation from ByteDance that the White House was looking for. I wouldn’t place bets that this will be resolved by September 20,” said Allan Grauberd, chair of the securities and capital markets group at Moses & Singer.

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