Twitter approaches ByteDance to take over TikTok’s U.S. operations

Twitter approaches ByteDance to take over TikTok’s U.S. operations

by Pranali Mehta


American social networking service, Twitter Inc., has reportedly approached ByteDance for the acquisition of TikTok’s U.S. operations amidst doubts over Twitter’s capability to put together financing for a potential deal. As per sources, it is less likely that Twitter would be able to outbid Microsoft Corporation and close such a transformative deal within the 45 days deadline that U.S. President Donald Trump has given to ByteDance for agreeing to a sale.

According to Erik Gordon, a Professor at the University of Michigan, Twitter will face a hard time putting together adequate financing for the acquisition of even the U.S. operations of TikTok as it doesn’t possess enough borrowing capacity. He has further stated that the terms of the agreement would be tough, in case Twitter tries to put together an investor group. Twitter’s own stakeholders might be in favor of management focus on its existing business, added Gordon.

Twitter has a market value of nearly $30 billion, nearly the same as the overall valuation of TikTok’s assets that are to be divested. While Twitter would need to raise additional capital for financing the transaction, sources state that, Silver Lake, one of the stakeholders in Twitter, has expressed interest in the funding of a potential deal.

The U.S. President has lately imposed bans on U.S. transactions with the China-based owners of TikTok and WeChat, thereby escalating tensions between the two nations. Trump has stated that he would support Microsoft’s efforts towards the takeover of TikTok’s U.S. operations, provided the U.S. government receives a considerable share of the transaction proceeds. The President has further expressed that he would ban the TikTok app on September 15.

For the acquisition, Twitter has privately made a case intending to face less regulatory scrutiny as compared to Microsoft, without facing any pressure from China as the social networking service is not active in that country. According to reports, TikTok was fired by U.S. lawmakers over concerns of national security around data collection.


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Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...