Blackstone does not want stake in TikTok US anymore
What's the story
Private equity giant Blackstone has withdrawn from a consortium looking to invest in TikTok's US operations. The move comes as uncertainty continues to grow and delays plague the deal, which is now at the heart of US-China trade talks. Blackstone was supposed to take a minority stake in TikTok's US business under a plan led by President Donald Trump.
Group details
Deal would have seen US investors owning 80% of TikTok
The consortium, led by Susquehanna International Group and General Atlantic (both investors in ByteDance), was the front-runner to acquire TikTok's US business. The proposed deal would have seen US investors owning 80% of TikTok while its Chinese owner ByteDance would keep a minority stake. However, Blackstone's exit has thrown a spanner in the works of this high-profile negotiation.
Policy backlash
Deadline for ByteDance to divest TikTok extended multiple times
The deadline for ByteDance to divest TikTok in the US has been extended multiple times, leaving investors in limbo. Last month, Trump signed an executive order pushing the deadline to September 17. In April 2024, Congress had passed a law requiring TikTok's sale or shutdown by January 19, 2025. These extensions have drawn flak from some lawmakers who accuse the Trump administration of ignoring national security concerns over Chinese control of TikTok.
Strategic moves
ByteDance exploring sale or restructuring of US operations
In light of these concerns, ByteDance is considering different strategies for its US operations, including a potential sale or restructuring. The US consortium also includes KKR and new investors like Andreessen Horowitz. Oracle is also likely to invest. However, it is unclear if other bidders in the consortium are still interested after Blackstone's exit from the deal.
Future prospects
Negotiations to spin off TikTok's US operations stalled
Negotiations were underway this spring to spin off TikTok's US operations into a new firm. However, talks stalled after China refused to approve the transaction in response to Trump's tariffs on Chinese goods. If finalized, the deal would see a new US app owned by a joint venture between a US investor consortium and ByteDance with a minority stake.