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Deal keeps TikTok operating in US under US-controlled

ownership

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ByteDance to keep single largest ownership stake at 19.9%

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sources

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Deal expected to close in 30-45 days, CNBC reports

(Updates headline, adds context on US appointed board member,

US investors in ByteDance)

By Andrea Shalal and Deborah Mary Sophia

WASHINGTON, Sept 16 (Reuters) - President Donald Trump

on Tuesday announced an agreement between the U.S. and China to

keep TikTok operating in the United States, with three sources

familiar with the matter saying the deal was similar to one

discussed earlier this year.

The agreement requires TikTok's American assets to be

transferred to U.S. owners from China's ByteDance, potentially

resolving a saga that has lingered for nearly a year.

A deal for the popular social media app, which counts 170

million U.S. users, would represent a breakthrough in

months-long talks between the two biggest economies as they seek

to defuse a wide-ranging trade war that has unnerved global

markets.

"We have a deal on TikTok ... We have a group of very big

companies that want to buy it," Trump said at a White House

briefing, without providing further details. The announcement

comes a day before a September 17 deadline to sell or shut down

the short video app.

Later in the day the White House extended that deadline

until December 16. The White House declined to provide any

further details on the agreement with China.

The delay will give ByteDance another 90 days to finalize an

agreement to transfer TikTok's American assets to U.S. owners,

suggesting much work needs to be done to close the complex

transaction.

The U.S. entity will have an American-dominated board, the

Wall Street Journal reported, with one member designated by the

U.S. government.

The idea takes a page from a recent national security

agreement inked by the Trump administration that allowed Nippon

Steel ( NISTF ) to buy U.S. Steel after allowing the U.S. to name

a board member, in addition to having a Golden Share.

Any agreement may require approval by the

Republican-controlled Congress, which passed a law in 2024

during the Biden Administration that required TikTok's

divestiture due to fears that its U.S. user data could be

accessed by the Chinese government, allowing Beijing to spy on

Americans or conduct influence operations through the app.

The basics of the new deal, also similar to April, include

that ByteDance will keep the single largest ownership stake at

19.9%, just under the law's 20% threshold, two of the sources

said.

While the broad terms are expected to remain the same, the

sources did say they do not know what the final deal would

exactly look like, given the potential for last-minute changes.

U.S. Treasury Secretary Scott Bessent told CNBC on Tuesday

the commercial terms of the deal had, in essence, been done

since around March with just a few details left to be ironed

out.

"This deal wouldn't be done without proper safeguards for

U.S. national security," Bessent said. "It seems as though we

were also able to meet the Chinese interest."

CNBC reported Tuesday that the deal is expected to be closed

within the next 30 to 45 days, and that the agreement will

include existing investors in TikTok's China-based parent,

ByteDance, and new investors.

The details are in line with Reuters' reporting in April

that the deal would spin off TikTok's U.S. operations into a new

company based in the U.S. and majority-owned and operated by

U.S. investors.

Jeff Yass' Susquehanna International Group, General

Atlantic, Kohlberg Kravis Roberts and Sequoia Capital are among

ByteDance's U.S. backers.

The Trump administration has declined to enforce the law due

to worries it would anger TikTok's huge user base and disrupt

political communications, instead extending the divestiture

deadline on three separate occasions.

Trump, who has credited TikTok with helping him win

re-election last year and has 15 million followers on his

personal account, was expected to extend the deadline for the

fourth time. The White House also launched an official TikTok

account last month.

TARIFFS AND TIKTOK

A deal for TikTok, which had been in the works in the

spring, was put on hold after China indicated it would not

approve it following Trump's announcements of tariffs on Chinese

goods.

Washington has said that TikTok's ownership by ByteDance

makes it beholden to the Chinese government.

But the company has said U.S. officials have misstated its

ties to China, arguing its content recommendation engine and

user data are stored in the U.S. on cloud servers operated by

Oracle, while content moderation decisions that affect American

users are also made in the U.S.

CNBC reported on Tuesday that Oracle will keep its cloud

deal with TikTok. Reuters reported earlier this year that the

White House was working on a plan to tap Oracle, along with a

group of outside investors, to control the app's operations.

As part of the plan, Oracle would have been responsible for

addressing national security issues, Reuters had reported.

Oracle shares pared some gains on Tuesday following the news

and were last up 1%.

A framework agreement was reached by officials from both

countries on Monday. A final confirmation on the deal is

expected on Friday in a call between Trump and Chinese President

Xi Jinping.

Trump said in March that his administration was in touch

with four different groups on TikTok's sale. Microsoft ( MSFT ),

Amazon ( AMZN ), billionaire Frank McCourt and a consortium led

by the founder of OnlyFans have been among the bidders,

according to reports.