Beijing unlikely to approve ByteDance's TikTok deal with Oracle -Global Times
SHANGHAI, Sept 22 (Reuters) - A deal China's ByteDance has struck with Oracle Corp ORCL.N and Walmart Inc WMT.N over the future of its video-streaming app TikTok is unlikely to receive Chinese government approval, state-backed newspaper Global Times said in an editorial.
ByteDance has said it will create a U.S. subsidiary partly owned by U.S. majors Oracle and Walmart and managed mainly by Americans, to pacify the administration of U.S. President Donald Trump which had planned to ban TikTok on security grounds.
"It is clear that these articles (terms) extensively show Washington's bullying style and hooligan logic. They hurt China's national security, interests and dignity," said the English version of the editorial published late on Monday and which was also carried in the newspaper's Chinese edition.
The unidentified author objected to a requirement that four of the five board seats of TikTok Global be occupied by Americans and only one reserved for a Chinese national, as well as the inclusion of a U.S-approved "national security director".
It also denounced a requirement that ByteDance reveal TikTok's source code to Oracle as part of the latter's stake purchase, as well as the separate management of TikTok from Chinese equivalent Douyin.
"As TikTok and Douyin should have the same source code, this means the U.S. can get to know the operations of Douyin," the editorial continued.
"If the reorganization of TikTok under U.S. manipulation becomes a model, it means once any successful Chinese company expands its business to the U.S. and becomes competitive, it will be targeted by the U.S. and turned into a U.S.-controlled company via trickery and coercion, which eventually serves only U.S. interests," the author wrote.
The Global Times is a tabloid published by the People's Daily, the official newspaper of China's ruling Communist Party, but does not speak on behalf of the party and government unlike its parent publication.
Over the weekend, ByteDance and Oracle announced they had reached a deal that would satisfy Trump's call for TikTok to be sold to an American buyer or face shutdown in the United States.
However, both sides have framed the deal differently in public statements.
ByteDance has said TikTok Global will be its subsidiary of which it will own 80%.
Oracle has said ByteDance's ownership would be distributed to ByteDance's investors, many of which are U.S.-based and that the Beijing-based firm itself would have no stake in TikTok Global.
The deal requires approval from regulators in both Beijing and Washington.
(Reporting by Josh Horwitz; Editing by Christopher Cushing)
((Josh.Horwitz@thomsonreuters.com; +86 21 20830007;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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