TikTok's US Operations Set for Major Restructuring with New Investors

The White House is on the verge of approving a significant deal involving TikTok's US operations. According to sources, a group of new external investors, including a16z, Blackstone Group, and Silver Lake Capital, will own approximately half of TikTok's US business. These investors are large private equity firms that will play a crucial role in the separation of TikTok's US operations from its Beijing-based parent company, ByteDance.

Existing major investors in TikTok, such as General Atlantic, Susquehanna, KKR, and Coatue, will retain approximately 30% of the shares in the US business. This restructuring is part of a broader effort to comply with US legislation, which requires that a "foreign adversary" should not control more than one-fifth of the shares. ByteDance will retain less than 20% of the business shares to meet this requirement.

Officials from President Trump's administration are scheduled to meet to discuss the negotiation status. If the President gives approval, the deal could be announced quickly. However, one source cautioned that the situation remains volatile, and the White House could still change its plans. The transaction terms are still in the preliminary stages and may change. The plan will require several months of further due diligence, structural adjustments, and other corporate financing commitments, which are typical in acquisition transactions. The structure may change, with some equity supporters potentially increasing or decreasing their proposed investments. These groups will have three to four months to complete the separation process.

This deal comes ahead of the April 5th US legal deadline, which requires that unless the Beijing-based owner sells it to a non-Chinese entity, the app will be banned in the US. The sources stated that the US business will be separated from its Beijing-based parent company ByteDance. The plan will still require several months of further due diligence, structural adjustments, and other corporate financing commitments, which are a typical process in acquisition transactions, and the structure may change, with some equity supporters potentially increasing or decreasing their proposed investments. One source mentioned that these groups will have three to four months to complete the separation process.