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Microsoft announced on Sunday that it is in negotiations with ByteDance to acquire TikTok in the United States, Canada, Australia, and New Zealand. However, that pursuit seems to be getting complicated with each passing day. Conflicting reports are coming out of the discussions.
The Financial Times reported on Thursday that Microsoft wants to buy TikTok’s global business, not just a portion of it. The report cited as many as five people familiar with the ongoing discussions between the two companies. There reportedly hasn’t been any such talks yet but Microsoft has shown interest.
However, Business Insider has refuted the report, with a source claiming it’s “completely false”. Bloomberg also has a source saying the report is not true. The source, who has chosen to remain anonymous, says Microsoft is still focused on buying the popular Chinese app’s operations in the US, Canada, Australia, and New Zealand only.
The Indian government recently banned TikTok in the country on security grounds. The second most populous country in the world was TikTok’s biggest market. According to Sensor Tower data, the app had over 650 million downloads in the country.
A takeover by a non-Chinese company might pave a way for TikTok to make a comeback in India. And ByteDance would not want to miss out on such an opportunity. If the company fails to reach a deal with Microsoft for TikTok India, it may look out for other foreign investors or buyers.
Microsoft may push for a global takeover of TikTok
The Trump administration has threatened to ban TikTok over security concerns unless its Chinese owners sell the service in the US to an American company. Microsoft is already in talks with ByteDance and will likely reach a deal before the September 15 deadline.
However, instead of buying the service in just four countries, the company is now reportedly pushing for a global takeover. Apparently, this will reduce complications. Microsoft wants to acquire the global business of TikTok because of the difficulties of separating back-office functions. Additionally, a single owner across the world means TikTok users can continue using the app in any country they travel to.
That said, acquiring a business that’s valued at around $50 billion will be no easy. There will be obstacles, plenty of them. Microsoft reportedly wants a one year window to separate TikTok from ByteDance and address any security concerns from the US government.
However, that may not be enough. It may take a lot longer to separate the app from its Chinese parent, with one person saying it could take up to eight years.
Despite being a Chinese app, TikTok doesn’t operate in China. ByteDance has a separate but similar app called Duoyin for its domestic market. The FT report said this app will not be part of the deal even if Microsoft acquires TikTok’s global business. Unsurprisingly, both Microsoft and ByteDance have declined to comment on the matter.