A potential shotgun wedding to Microsoft Corp for TikTok’s U.S. operations provoked an outcry on Chinese social media as well as criticism from a prominent Chinese investor in TikTok owner ByteDance.
The U.S. tech giant formally declared its interest on Sunday after President Donald Trump, who has cited national security risks posed by the Chinese-owned short video app, reversed course on a planned ban and gave the two firms 45 days to come to a deal.
The proposed acquisition of parts of TikTok, which boasts 100 million U.S. users, would offer Microsoft a rare opportunity to become a major competitor to social media giants such as Facebook Inc and Snap Inc. Microsoft which owns the social media network LinkedIn for professional workers, is also seeking to buy TikTok’s Canadian, Australian and New Zealand interests.
Crumbling bilateral ties
ByteDance has not publicly confirmed the sale talks. But in an internal letter to staff on Monday seen by Reuters, the company’s founder and CEO Zhang Yiming said the firm had started talks with a tech company it did not identify to clear the way “for us to continue offering the TikTok app in the U.S.” But clinching a deal — potentially worth billions of dollars and a lightning rod for crumbling U.S-China relations — that will satisfy all parties will be a tall order. Mr. Zhang’s letter to staff also said ByteDance did not agree with the stance taken by the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes deals for national security risks, that it must fully divest TikTok'’ U.S. operations. “We disagree with this CFIUS conclusion,” the letter said but added: “...we understand the decision in the current macro environment.”
The United States has been “stretching the concept of national security”, presuming that companies are guilty without evidence, China’s Foreign Ministry spokesman Wang Wenbin told a briefing after being asked about U.S. actions against Chinese software companies.
