BENGALURU: Tech giant Microsoft on Sunday announced that it is planning to acquire TikTok businesses in the United States, Canada, Australia and New Zealand. The statement comes after Trump indicated that he would sign an executive order banning TikTok in the US over data privacy concerns arising from the possibility of user data being stored outside the country.
Microsoft, meanwhile said that the deal—which analysts peg at $50 billion—is expected to close no later than September 15, 2020. Microsoft’s interest in acquiring 100 per cent of these TikTok units follow Microsoft CEO Satya Nadella’s recent discussions with Trump. “Microsoft fully appreciates the importance of addressing the President’s concerns.
It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” the company said in its Sunday statement.
The US is the third largest market for TikTok in terms of revenue, generating $86.5 million (19 per cent of total revenues), according to a report from market intelligence firm Sensor Tower. In terms of downloads, US was the third largest market, behind India and China at over 160 million.
Both Microsoft and TikTok parent company Bytedance had earlier sent a notice of their intent to the Committee on Foreign Investment in the United States (CFIUS) to explore a potential purchase of Tik Tok in the US besides several other countries. Microsoft said it is also seeking investments from other American groups.
“The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries. Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred,” it added. TikTok however, continues to deny all allegations over privacy concerns.
Negotiation in progress
Microsoft and Bytedance earlier sent a notice of their intent to explore a potential purchase of TikTok in the US to a committee.