(Bloomberg) -- The Treasury Department, TikTok owner ByteDance Ltd. and Oracle Corp. have tentatively agreed to terms for Oracle’s bid for the U.S. operations of the social-media service, according to people familiar with the matter.
Treasury Secretary Steven Mnuchin sent Bytedance a revised terms sheet late Wednesday and the company and Oracle accepted it, the people said. They described the changes as addressing national security concerns about the transaction and asked not to be identified because of the sensitivity of the matter.
Bytedance is trying to win U.S. approval for a transaction with Oracle that would leave the Chinese-headquartered parent company with majority ownership of TikTok. President Donald Trump demanded the sale of the service in August, declaring in executive orders that the popular video-sharing app is a national security threat.
Any deal needs to be approved by both Trump -- who could still reject the transaction -- and the Chinese government, where officials have accused the U.S. of “economic bullying.”
White House senior adviser Jared Kushner is aware of the revised terms but hasn’t reviewed the latest details in depth and hasn’t weighed in on whether Trump should sign off on the deal, one person familiar with the matter said.
The White House and Treasury declined to comment. The Chinese embassy in Washington didn’t respond to requests for comment.
White House Chief of Staff Mark Meadows said early Thursday that he’s concerned that Oracle’s bid for TikTok may be a “repackaging” that won’t meet the president’s goals.
“We’re still looking at the potential details of the deal, and whether it meets the national-security thresholds, the American-interest thresholds,” Meadows said. “My big concern is if all we’re doing is repackaging it and still keeping it as a predominantly Chinese-government run company, that would not sit well with the original goal the president outlined.”
Under the plan, Oracle would acquire a minority stake in a newly formed TikTok that would be headquartered in the U.S. with an independent board approved by the U.S. government.
The new terms, which are designed to protect the data of U.S. citizens from falling into Chinese hands, include 20 pages of detailed provisions over data and national security, the people said. Under those terms, the board of directors would have to consist entirely of U.S. citizens and would include a national security committee.
That body would be chaired by an American data-security expert who would be the primary contact with the Committee on Foreign Investment in the U.S., which would oversee any issues of concern to the U.S. government. The previous terms hadn’t included language on the formation of that committee.
Terms of the proposed deal would give Oracle full access to TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to access data on the video-sharing app’s 100 million American users, Bloomberg reported.
At least three shareholders in TikTok’s Chinese parent company -- General Atlantic, Sequoia Capital and Coatue Management -- would take stakes in the new business, Bloomberg has reported.
Walmart Inc., which had previously partnered with Microsoft Corp. to make an outright bid for TikTok’s U.S. business, remains interested in investing as well, and could also end up with a seat on the board, according to one of the people. With Oracle, Walmart and the continued involvement of existing U.S. investors, the new company, TikTok Global, would have a strong contingent of American investors, some of the people said.
(Updates with details on Kushner and deal terms from fifth paragraph)
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