President Donald Trump has given his approval for Oracle Corp.’s bid for the American operations of TikTok.
The agreed deal that would give Oracle a minority stake in the new company to be called TikTok Global, was announced Saturday evening. President Trump’s approval of the deal, puts the popular video-sharing app on course to escape an imposed U.S. ban which accused the company of threatening national security.
“I approved the deal in concept,” Trump told reporters Saturday as he left the White House for a campaign rally in Fayetteville, North Carolina. “If they get it done, that’s great. If they don’t, that’s OK too.”
For the deal to go on, the Chinese government must sign off on it, however, ByteDance is confident that the deal will receive approval of the Chinese government.
In statement Oracle said it had taken a 12.5% stake in TikTok Global and become the app’s secure cloud technology provider.
Also in statement, Walmart confirmed that it had “tentatively agreed to purchase 7.5% of TikTok Global as well as entering into commercial agreements to provide our commerce, fulfillment, payments and other omni channel services to TikTok Global.”
It added that there was “still work to do on final agreements,” and that Walmart CEO Doug McMillon will be one of five board members of the newly created company. Four of the five board seats will be filled by Americans, according to the statement.
ByteDance would retain a majority of TikTok’s assets and control over the algorithm, according to the terms of the agreement reached earlier in the week.
In a statement Saturday evening, TikTok confirmed the news and said it was also working with Walmart on a commercial partnership.
“Both companies will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company,” the statement said. “We will also maintain and expand TikTok Global’s headquarters in the US, while bringing 25,000 jobs across the country.”
It added that it “pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. administration and settle questions around TikTok’s future in the U.S.”
Following Trumps approval of the deal, the Commerce Department on Saturday delayed by a week a ban on U.S downloads of TikTok and WeChat another popular Chinese commerce app.
The new company, TikTok Global has agreed to give $5 billion in new tax dollars to the U.S. and set up a new education fund, which Trump said would satisfy his demand that the government receive a payment from the deal.
“They’re going to be setting up a very large fund,” he said. “That’s their contribution that I’ve been asking for.”
With the agreement, TikTok’s battle with Washington can become a thing of the past with the company focusing on its growth in the U.S, where the app is popular among millions of users, particularly teenagers.
Oracle being tech powerhouse that makes enterprise software and hardware used by businesses, including big corporations, to operate their networks, the deal has been viewed as a bold and surprising move by many experts.
The deal is subject to an agreement that requires approval by the Committee on Foreign Investment according to the U.S Treasury Department.