ByteDance is poised to miss US deadline for TikTok sale

TikTok owner ByteDance has been told by Beijing that any deal must be submitted for approval with detailed information about technical and financial issues, and the review will be substantial and take time

Microsoft and Oracle remain interested in buying TikTok’s US business, despite Beijing’s involvement

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ByteDance founder Zhang Yiming has been reluctant to give up TikTok’s US operations from the start because he sees the business as a viable long-term competitor to Facebook and Google. Photo: Reuters

Published: 7:30pm, 10 Sep 2020Updated: 4:10pm, 15 Oct 2020

ByteDance is increasingly likely to miss a Trump administration deadline for the sale of its TikTok US operations after new Chinese regulations complicated negotiations with bidders Microsoft Corp and Oracle Corp, according to people familiar with the matter.

ByteDance probably needs beyond the US executive order ban on September 20 to nail down an agreement with either party because of the regulatory review, said the people, asking not to be identified because the matter is private.

In preliminary talks with Chinese government officials, ByteDance has been told any proposal must be submitted for approval with detailed information about technical and financial issues, and the review will be substantial and take time, one of the people said. The officials have not been willing to give specific guidance on what kind of deal would work, the person said.

Microsoft and Oracle, which had submitted proposals before the Chinese regulations hit, both continue to be interested in buying the US arm of the hit short video-sharing app and have not been dissuaded by Beijing’s involvement, the people said. The bidders have asked ByteDance to get as much clarity as possible from Beijing on the new regulations, which prohibit the export of certain artificial intelligence technologies that TikTok uses, they said.

The parties are still racing to present a preliminary deal to the White House before this month’s deadline, though no agreement could be finalised before Beijing’s sign-off. It is also possible that ByteDance pulls out of a sale altogether if it determines it cannot satisfy both governments, the bidders and its own shareholders.