Caixin
Aug 28, 2020 03:39 AM
BUSINESS & TECH

Walmart Joins Microsoft in Pursuit of Deal to Acquire TikTok

The logo for ByteDance Ltd.'s TikTok app is arranged for a photograph on a smartphone in Hong Kong
The logo for ByteDance Ltd.'s TikTok app is arranged for a photograph on a smartphone in Hong Kong

(Bloomberg) — Walmart Inc. is teaming up with Microsoft Corp. in a joint bid to acquire TikTok, a surprise move that signals the retail giant’s desire to become a force in technology and media and reach younger shoppers.

The move could help expand Walmart’s third-party online marketplace unit along with its nascent advertising arm, Walmart said in an emailed statement. Chief Executive Officer Doug McMillon has said he’d like to expand those two areas. The two companies already work together, as Walmart uses Microsoft’s Azure cloud platform across the entire company.

Walmart’s shares jumped as much as 3.6% to $135.47 in New York following news of the joint pursuit of TikTok, the biggest intraday gain since July 7.

TikTok, owned by China-based ByteDance Ltd., is fielding interest in its operations in the U.S. and a handful of other countries. President Donald Trump recently ordered ByteDance to sell TikTok’s U.S. assets within 90 days.

Microsoft has been in discussions for weeks to buy TikTok’s business in the U.S., Canada, Australia and New Zealand. Other companies have also emerged as potential bidders, including Oracle Corp. and Twitter Inc. It’s unclear how far those discussions have gone. Microsoft is the only company to publicly confirm acquisition talks.

CNBC reported Thursday that TikTok is nearing an agreement that could be announced as soon as next week. The deal is likely to be in the $20 billion to $30 billion range, the report said, citing unidentified sources familiar with the matter.

Kevin Mayer, chief executive of TikTok, announced his resignation Thursday. Mayer, a former Disney executive, took the top position at the embattled company less than three months ago.

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Walmart’s interest in the popular app shows how serious McMillon is about moving the world’s biggest retailer into the faster-growing arena of media and online content. It has partnered with and bought a stake in Israeli video-production company Eko, which has developed things like interactive toy catalogs for Walmart.

Other moves have failed, though: Walmart sold its video-streaming service Vudu earlier this year, as the business had been leapfrogged by subscription services like Netflix and Hulu.

Earlier this week TikTok and ByteDance filed a lawsuit in federal court challenging Trump’s executive order, arguing the president’s decision was made “for political reasons,” is unconstitutional and violates rights to due process.

Contact editor Bob Simison (bobsimison@caixin.com).

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