Since President Donald Trump issued the executive order prompting TikTok to get acquired by a U.S.-based company or to risk being banned in the country, some companies have already shown their interest in buying TikTok.
China through the Ministry of Commerce has issued a new set of regulations that may halt the proposed acquisition of TikTok North America’s operations. The ministry of commerce in conjunction with the Ministry of Science and Technology has formulated, adjusted, and published a catalog of technologies that prohibit or restrict exports.
As the Ministry noted, the last revision of exportable technologies and scope definition was last made in 2008 and noted the need to adjust the review owing to the rapid development of science and technology and the continuous improvement of China’s scientific and technological strength and industrial competitiveness. The ministry also stated that “the main purpose is to regulate technology export management, promote technological progress and foreign economic and technological cooperation, and safeguard the national economy.”
The timing of this review from the Chinese government may halt with the proposed acquisition of ByteDance’s TikTok operations in North America as well as the associated countries. As Bloomberg reported, ByteDance is torn between two administrations, The United States of America and China, that are known to have a tense economic relationship. The company has stated that it will strictly comply with China’s new regulations, a move that may not see the deal close before the U.S. elections.
Some Firms Already Showed Interest in TikTok Acquisition Deal
Since President Donald Trump issued the executive order prompting TikTok to get acquired by a U.S.-based company or risk being banned in the country, a handful of companies have shown interest in the TikTok acquisition deal.
The first and most prominent firm pitched with TikTok’s acquisition is Microsoft Corporation (NASDAQ: MSFT). The Microsoft (MSFT) deal is projected to range from as low as $10 billion to as high as $30 billion if successful. The proposed deal will help Microsoft to take control of the app with a huge user base, and help advance its reach in the social media world following its $26.2 billion acquired Corporate Networking App LinkedIn back in 2016.
Besides Microsoft, other US-based companies including Oracle Corporation (NYSE: ORCL), and Walmart Inc (NYSE: WMT) have shown interest in TikTok’s acquisition deal. Foreign firms including India’s Reliance Industries Ltd have also shown interest while Centricus Asset Management Ltd and Triller Inc were said to have made a last-minute pitch on Friday to buy TikTok’s operations in several countries for $20 billion according to Bloomberg.
With the well-announced interest from these firms, none seem to have been favored by TikTok yet and the new regulation from Beijing may seem to have bought the company some more time.
TikTok Suing Trump Administration
ByteDance’s disinterest in giving up the operations of TikTok became more pronounced when the firm stated that it will be suing the Trump administration challenging the decision to ban its operations. Backing the decision to challenge the Executive order, a TikTok spokesperson noted:
“Even though we strongly disagree with the Administration’s concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution. What we encountered instead was a lack of due process as the Administration paid no attention to facts and tried to insert itself into negotiations between private businesses. To ensure that the rule of law prevails and that our company and users are treated fairly, we have no choice but to challenge the Executive Order through the judicial system.”
This lawsuit, as well as a determination to comply with Beijing’s new regulations, has just made the whole TikTok acquisition deal more complicated.