Walmart buys 7.5% share in new TikTok US entity

Walmart will buy a 7.5 per cent stake in TikTok as part of a deal to maintain the social media company's US presence with the blessing of the president.

The supermarket giant will invest alongside Oracle to collectively take a 20 per cent stake in a new company called TikTok Global, with Chinese parent company ByteDance still owning a majority share.

Walmart’s minority stake in TikTok Global will see it provide services like payments, e-commerce and order fulfilment. Chief executive Doug McMillon will also join the new board of directors.

“This partnership will provide Walmart with an important way for us to expand our reach and serve omnichannel customers as well as grow our third-party marketplace, fulfilment and advertising businesses,” read a statement from Walmart.

TikTok Global is set for an Initial Public Offering in the US to confirm its public company status and convince the Trump administration of its adherence to regulations and commitment to national security.

“TikTok Global will also launch a listing plan to further enhance its corporate governance structure and transparency,” read the statement, although it did not specify how much it intended to raise or which stock market it will list on.

The move is being made to avert the order to ban TikTok in the US - something which the US Department of Commerce confirmed last week. This was in response to Trump’s executive orders signed on 6 August, banning several Chinese apps suspected of stealing American user's data.

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