Walmart Inc said it was joining Microsoft in a offer for U.S. assets from social media firm TikTok, announcing its intentions hours after the chief executive of the video company said he'd step down. CEO Kevin Mayer, a prominent former Disney executive, is leaving three months after joining TikTok, in the midst of negotiations to sell the U.S. operations of the Chinese short-form video app to Microsoft Corp or Oracle Corp. TikTok owner ByteDance plans to enter in the next 24 to 48 hours into exclusive talks with a bidder and ink a deal by Sept. 15, people familiar with the matter told Reuters. ByteDance refused to provide comments.
TikTok 's sale is taking place as the firm is under pressure from U.S. administration. President Donald Trump, due to the huge volume of private data the app compiles on U.S. users, as a possible national security risk. The Trump administration has requested that China sell its U.S. operations to ByteDance, which owns TikTok globally. TikTok was also appealing earlier this week over an executive order essentially banning it in the U.S.
Retailer Walmart praised the incorporation of e-commerce and advertisement technologies into other markets by TikTok, and said a three-way alliance could carry the penetration into the United States. The deal will help Walmart attract consumers through the networks of virtual and physical sales, and expand its online store and advertising. Walmart shares rose 6 per cent. "We are optimistic that a collaboration between Walmart and Microsoft will fulfill all U.S. TikTok users' needs while addressing U.S. government regulators' concerns," Walmart said in a statement.
Mayer was the top streaming executive of Walt Disney Co, before becoming TikTok chief executive and parent ByteDance chief operating officer on June 1. In a separate letter reviewed by Reuters, ByteDance founder and CEO Zhang Yiming said the company was "moving quickly to find solutions to the issues we face globally, particularly in the U.S. and India.' He said Mayer had joined just when the organization "arguably reached our most difficult moment." "It's never easy to get into a leadership position in a company that travels when fast as we are, and the circumstances that followed his arrival have made it all the more complicated," Zhang said.