Backers of a proposed new entity to take over Chinese-owned video-sharing app TikTok are working to create an ownership structure that would give U.S. interests a majority stake, in an effort to ease the Trump administration’s security concerns.
Under the latest plan for TikTok, Oracle Corp. ORCL, -0.41% and Walmart Inc. WMT, +0.31% could together own a significant stake, according to people familiar with the situation. That move, if combined with existing American investors, could put majority ownership in U.S. hands, the people said.
Walmart Chief Executive Doug McMillon is expected to get a board seat if the deal goes through, said some of the people familiar with the matter. As part of the current plan, TikTok would file for a U.S. initial public offering in about a year, said one of these people. Walmart, which previously looked to join with Microsoft Corp. MSFT, -1.04% on a TikTok deal, has been looking to ramp up its online presence to generate new revenue streams.
Trump administration officials have pushed for majority U.S. ownership of TikTok, which is owned by Beijing-based ByteDance Ltd. That goal could be met under the proposal for Oracle alone, or together with Walmart, to take significant ownership stakes. Their participation, together with existing U.S.-based ByteDance investors like Sequoia Capital, General Atlantic and Coatue Management LLC, could push U.S. ownership in the new entity above 50%.
The situation is highly fluid and it is unclear what the final terms of any deal would ultimately be. Trump and Chinese authorities must also sign off on any deal.
An expanded version of this report appears on WSJ.com.
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