U.S. President Donald Trump’s Intervention Fuelled Microsoft and TikTok…

A push by the Trump administration has got Microsoft to consider a massive acquisition of TikTok’s global operations. It remains to be seen if Microsoft is willing to shell some more tens of billions of dollars for this deal.

A recent report from the New York Times has brought a new twist to the Microsoft-TikTok story. Citing over a dozen people familiar with the matter, the NY Times reported that Microsoft’s acquisition talks with TikTok parent ByteDance “ballooned” this summer with the intervention of U.S. President Donald Trump.

The U.S. government’s executive order issued earlier this month asks TikTok to withdraw its operations from the country. Basically, the Trump administration has banned TikTok and other Chinese applications over alleged threats of national security. Post the executive order, TikTok has up to 45 days i.e. up to mid-September to finalize the deal.

Well, TikTok has already sued the U.S. government earlier this week for its forceful decision. But that’s another story! The political intervention has brought ahead tech giants like Microsoft Corporation (NASDAQ: MSFT) and Oracle Corporation (NYSE: ORCL), throwing their hats in the ring. The NY Times writes:

“What started as discussions about a small investment morphed into a big, messy, political soap opera. Pushed by President Trump, who has ordered TikTok’s U.S. operations to be sold or to cease operating, ByteDance is now discussing selling parts of TikTok’s global operations to several potential bidders. And with so many groups jumping into the talks to get a piece of any deal, all are trying to drive their own interests and agendas”.

Earlier there were reports of Microsoft acquiring the U.S. operations for TikTok. However, in a meeting with CEO Satya Nadella, President Trump asked the company to work out a complete acquisition of TikTok’s global operations. The report notes that Microsoft is currently reluctant for any large acquisition.

Developments with the Microsoft and TikTok Deal

It’s interesting to see how Microsoft has been roped into the possibility of acquiring 100% from the previous 30%. Currently, TikTok’s valuations stand anywhere between $20-$50 billion, based on the share of acquisition. Well, if through, it will be Microsoft’s biggest acquisition after LinkedIn. The NY Times report mentions:

“ByteDance and Microsoft came to see an acquisition of TikTok’s U.S. operations as a cleaner option, they added. Microsoft could allow TikTok to operate as a stand-alone unit, similar to how it had treated past large acquisitions, such as its $2.5 billion acquisition of the company behind the video game Minecraft in 2014 and its $26 billion purchase of professional networking site LinkedIn in 2016”.

Also, it would mean TikTok ditching the Google Cloud platform and moving up to Microsoft’s Azure platform. This will also make TikTok as the biggest customers for Microsoft’s cloud services. On the other, a deal with Microsoft will boost TikTok’s valuations outside China to a whopping $80 billion.

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