MS Negotiates Acquisition to Take Over TikTok Business Rights Entirely

Originally planned to transfer business rights for the US, Canada, Australia, and New Zealand
but India and Europe added to the list

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Microsoft (MS), which is in acquisition talks with Chinese social networking service (SNS) TikTok, is reportedly negotiating to take over TikTok's entire global business.

On the 6th (local time), Bloomberg News, citing the Financial Times (FT), reported that MS is negotiating to acquire the operating rights of TikTok's global business, including India and Europe. Initially, MS was negotiating to take over TikTok's business operations in the United States, Canada, Australia, and New Zealand, but India and Europe have now been added. Since TikTok does not operate in China, this essentially means acquiring the operating rights for TikTok in all regions.

A source explained that the discussion is moving toward MS acquiring the entire TikTok business, citing the need to provide uninterrupted service when TikTok users travel to other countries.

The problem is that as the scope of negotiations expands, it has become uncertain whether the talks will conclude by the September 15 deadline set by U.S. President Donald Trump for the MS-TikTok acquisition. Additionally, separating TikTok's technology from ByteDance is a separate issue. MS is also discussing adding a clause to the acquisition contract that allows for a one-year period after the acquisition to separate TikTok from ByteDance.

In particular, acquiring the operating rights for TikTok's business in India is considered a major point of contention. ByteDance is reportedly open to transferring TikTok's Indian business division to a foreign operator other than MS or to an Indian company. If the operating rights for the Indian market are transferred to a company other than MS, ByteDance can maintain a minority stake in India, its largest market, and continue to earn revenue from the Indian market.

According to Sensor Tower data, India is TikTok's largest market, recording 650 million downloads. However, amid heightened anti-China sentiment in India following clashes between Indian and Chinese troops in the Himalayas, the Indian government banned the use of TikTok and 59 other Chinese applications (apps) citing national security reasons.

Meanwhile, TikTok announced plans to invest 420 million euros (approximately 600 billion KRW) to build its first data center in Europe, located in Ireland. Furthermore, ByteDance, TikTok's parent company, is reportedly considering establishing TikTok's global headquarters in London.