The retail giant Walmart has entered the competition surrounding the potential sale of the TikTok’s US operations. It has teamed up with Microsoft on Thursday but it originally had a different plan.
Alphabet and SoftBank’s initial partnership with Walmart, organized by SoftBank COO Marcelo Claure
Initially, Walmart hoped to gain a majority stake in TikTok. They had planned to join hands with Google’s parent company Alphabet and Japanese investor SoftBank. These partners would get minority stakes.
SoftBank COO Marcelo Claure organized the group. He believed that the combination of Walmart’s appeal to customers in conventional states and Google’s strong cloud computing business would make a successful partnership both politically and financially.
Trump administration disagrees with the retail giant receiving majority stake in TikTok
The US government demanded that only a tech company will lead the acquisition deal. It will be more consistent with the administration’s argument that TikTok’s Chinese owner ByteDance poses a threat to national security.
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President Trump has aggressively forced the sale of TikTok to an American company on grounds of a threat to national security. He issued two executive orders in recent weeks targeting the short video app.
One was to invalidate ByteDance’s purchase of Musical.ly, the app that eventually became TikTok. The second forbid American companies from doing business with TikTok. TikTok sued the Trump administration early this week over the first order, claiming that it violated the company’s right to due process.
Walmart and Microsoft team up against rival Oracle to bid for TikTok’s US operations
Since then, Walmart has struck a partnership with Microsoft and will receive a minority stake in TikTok. A Walmart spokesperson said that they are confident regarding this partnership meeting the expectations of US-based TikTok users. It will also satisfy the concerns of US government regulators.
Walmart and Microsoft are competing with Oracle who is reportedly working with US investors, including General Atlantic and Sequoia Capital. These investors already have a stake in TikTok.
This deal is reportedly set to value the TikTok’s US operations in the range of $20 billion to $30 billion. It could be completed in the next 48 hours.