TikTok, Twitter in Merger Talks

Following President Trump’s decision to end TikTok reign in the United States and protect the American people against an ‘unusual or extraordinary threat,’ Twitter has approached ByteDance, the Chinese company that owns TikTok to discuss possible merger or acquisition, according to a Wall Street Journal report on Saturday.

President Trump had signed an executive order on Thursday under the International Emergency Economic Powers Act, a law that allows the president to regulate international commerce in an unusual or extraordinary threat.

Part of the executive order read “The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.”

Last week, Trump had given TikTok 45 days to sell off its US operations to an American company or face a complete exit from the world’s largest market. Also, American companies are warned to stop doing business with the Chinese video app and other Chinese owned social media companies like WeChat, saying it “threaten the national security, foreign policy, and economy of the United States.”

The threat has led to American companies approaching the Chinese short video app for complete acquisition of North American operations.

Microsoft had announced last week that it was in talks with the company to acquire its US, Canada, Australia and New Zealand operations. On Thursday, Financial Times reported that Microsoft has expanded discussions to TikTok entire operations.

However, on Saturday the Wall Street Journal reported that Twitter is in preliminary discussions for a merger with TikTok. A move that would likely allow Twitter to manage the company’s North American operations in line with Trump’s demand.

Trump had accused Chinese owned companies of working with the Chinese government to access American key data and expose the world’s largest economy to security threats. An accusation the companies have denied over and over again.

While it is uncertain how Twitter plans to raise the money for the acquisition or merger, it would be a herculean task given the company’s present financial position when compared with Microsoft.