(RTTNews) - Oracle and Walmart have tentatively agreed to acquire 20% of the newly formed TikTok Global business, the companies said in a statement.
TikTok's parent company ByteDance has received tentative approval for an agreement with the U.S. Government to resolve the outstanding issues.
In the deal, Walmart has tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide ecommerce, fulfillment, payments and other omnichannel services to TikTok Global.
As a part of the deal, TikTok is forming a new company called TikTok Global, which will be accountable for all TikTok services to users in United States and most of the users in the rest of the world.
TikTok Global will create more than 25,000 new jobs in the United States and TikTok Global will pay more than $5 billion in new tax to the U.S. Treasury.
TikTok Global will be majority owned by American investors, including Oracle and Walmart. TikTok Global will be an independent American company, headquartered in the U.S., with four Americans out of the five member Board of Directors.
Walmart said its chief executive officer, Doug McMillon, would also serve as one of five board members of the newly created company.
TikTok Global will have an initial public offering in less than 12 months and be listed on a U.S. Exchange. After the IPO, U.S. ownership of TikTok Global will increase and continue to grow over time.
Oracle said it will become TikTok's secure cloud provider. Data privacy for 100 million American TikTok users will be quickly established by moving all American data to Oracle's Generation 2 Cloud data centers.
Oracle also said it along with TikTok Global, SIG, General Atlantic, Sequoia, Walmart and Coatue will create an educational initiative to develop and deliver an AI-driven online video curriculum to teach children from inner cities to the suburbs, a variety of courses from basic reading and math to science, history and computer engineering.
Earlier this month, several media reports said ByteDance selected Oracle to be the social video app's U.S. technology partner, and that Oracle would take a significant stake in the business.
Microsoft said earlier this month that ByteDance would not sell TikTok's US operations to the company. Microsoft, in August, said it was in talks to buy TikTok in the United States, Canada, Australia and New Zealand. Weeks later Walmart said it was in discussion with Microsoft on a possible TikTok deal.
It was on August 6 that Trump signed the Executive Order to ban TikTok, along with another Chinese firm WeChat, citing a threat to national security, foreign policy, and economy of the United States.
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