TikTok is nearing a deal to sell its U.S. operations and could announce a deal in the coming days, according to people familiar with the matter.
Kevin Mayer, TikTok's CEO, announced his resignation Thursday after news of the announcement leaked to the Financial Times. Mayer was originally going to announce his decision to step down along with the sale agreement next week, but he pushed up the timing to address the news, said one of the people, who asked not to be named because the discussions are private. Mayer joined TikTok earlier this year after running Disney's streaming video operations.
Vanessa Pappas, the head of TikTok's U.S. business, will run TikTok following Mayer's departure, the company said in an internal memo to employees. ByteDance, the China-based parent company of TikTok, is in talks to sell TikTok's U.S., Canadian, New Zealand and Australian operations after the Trump administration forced the company to divest its assets on national security grounds. TikTok has sued the government over a separate executive order that has threatened to ban the application next month.
TikTok hasn't decided on a buyer and is still discussing bids from Oracle and a joint bid from Walmart and Microsoft. Walmart confirmed its involvement in a potential TikTok deal, saying it would partner with Microsoft. Earlier, CNBC had reported Walmart had been in talks with SoftBank on a joint bid for the company, but that effort was likely to fail because the consortium didn't have a cloud technology component.
Walmart shares rose more than 3% after it issued the following statement to CNBC:
"The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets," a Walmart spokesperson told CNBC. "We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses. We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of US government regulators."
Spokespeople for TikTok and SoftBank declined to comment. Microsoft was not immediately available to comment.
TikTok is likely to sell its U.S., Canadian, Australian and New Zealand operations for a valuation in the $20 billion to $30 billion range, but a price still hasn't been decided, the people said.