ByteDance Signs Contract to Set Up TikTok US Venture

TikTok owner ByteDance reached a deal to give a group of investors 50% ownership of a new venture controlling the short video app’s US operations. The group of investors is led by Oracle, Silver Lake Management, and Abu Dhabi-based MGX.

The agreement avoids a pending domestic ban of the app if ownership wasn’t transferred to US investors and comes more than five years after US President Donald Trump unsuccessfully attempted to shut down the app, citing user privacy and national security concerns. The three managing investors will each hold a 15% interest. Existing ByteDance investors will have a 30.1% stake, while ByteDance’s holdings will drop to 19.9%.

The new entity will be governed by a new, seven-member board, which will include TikTok CEO Shou Chew. It will moderate content on the app and protect user data. Financial details of the deal weren’t disclosed. Adam Presser, previously TikTok’s head of operations, trust and safety, takes over as CEO of the venture. In December, ByteDance signed a binding agreement with the three investors.