Blackstone Withdraws from Consortium Bidding for Stake in US-Based TikTok

Private equity giant Blackstone Inc. has officially exited a consortium of investors vying for a minority stake in the US operations of TikTok, the immensely popular short-form video app owned by China’s ByteDance Ltd. The move reshuffles the dynamics of an already closely-watched deal amidst regulatory and political scrutiny.

Stake Transferred to Remaining Consortium Members

According to a person familiar with the matter, Blackstone has ceded its potential stake to the other members of the consortium, which includes Oracle Corp., venture capital firm Andreessen Horowitz, and growth equity investor General Atlantic. The source, who requested anonymity due to the sensitive nature of the ongoing discussions, confirmed that the transaction allows the remaining partners to carry on with the deal independently.

Background: Blackstone’s Initial Role

Blackstone’s involvement in the TikTok deal dates back to late June, when former US President Donald Trump revealed that a US-based buyer had been identified to allow TikTok to continue operations in the country. The requirement stemmed from US government concerns about national security risks posed by ByteDance’s control of TikTok’s US user data.

Bloomberg later confirmed that the Trump-endorsed buyer was indeed the Oracle-led consortium that included Blackstone.

Political Pressure Behind the Deal

The deal was part of a broader push by the Trump administration to force TikTok to divest its US assets or risk a ban. The administration cited security concerns, alleging that TikTok could be compelled to share data with the Chinese government, an accusation ByteDance has consistently denied.

To facilitate the transition and satisfy national security reviews, the government granted a 90-day extension in late June to allow negotiations to proceed. That deadline is set to expire in mid-September.

Consortium Moves Forward Without Blackstone

Despite Blackstone’s departure, the remaining members of the consortium are reportedly committed to moving forward with the bid. Oracle is expected to play a leading role, leveraging its existing cloud infrastructure to manage and safeguard US user data. Andreessen Horowitz and General Atlantic, both well-known names in the tech investment space, are also expected to continue backing the acquisition.

No Official Comments from Parties Involved

As of now, none of the consortium partners—including Blackstone, Oracle, or ByteDance—have officially commented on the restructuring of the deal. The withdrawal was first reported by Reuters on Friday.

Implications of Blackstone’s Exit

Blackstone’s exit may alter the financial structure of the deal but is not expected to derail the acquisition effort entirely. Industry experts suggest that the investment firm may have reconsidered its role given the mounting regulatory complexity and potential reputational risks associated with the deal.

Analysts also point out that the absence of Blackstone, while significant, does not substantially reduce the purchasing power or influence of the remaining players in the consortium.

Conclusion

Blackstone’s withdrawal from the TikTok US stake bid comes at a critical juncture as the clock ticks on the government-imposed deadline. With Oracle and other venture partners pressing ahead, the future of TikTok’s US operations remains in flux but not without options. All eyes are now on the mid-September deadline, which could determine whether TikTok can maintain its foothold in one of its largest markets.

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