The deal to take control of TikTok’s U.S. business came with an unusual condition, according to people familiar with the matter. The investors — which include Oracle, Abu Dhabi investor MGX, and private-equity firm Silver Lake — “paid the Treasury Department about $2.5 billion when the deal closed in January,” reports the Wall Street Journal, “and are set to make several additional payments until hitting the $10 billion total.”
The $10 billion payment would be nearly unprecedented for a government helping arrange a transaction, historians have said… Investment bankers advising on a typical deal receive fees of less than 1% of the transaction value, and the percentage generally gets smaller as the deal size increases. Bank of America is in line to make some $130 million for advising railroad operator Norfolk Southern on its $71.5 billion sale to Union Pacific, one of the largest fees on record for a single bank on a deal. Administration officials have said the fee is justified given Trump’s role in saving TikTok in the U.S. and navigating negotiations with China to get the deal done while addressing the security concerns of lawmakers…
The TikTok fee extracted from private-sector investors is the administration’s latest transaction involving the nation’s largest businesses. Trump took a nearly 10% stake in semiconductor company Intel and has agreed to take a chunk of chip sales to China from Nvidia in exchange for granting export licenses. The administration has also taken equity stakes in other companies and has a say in the operations of U.S. Steel following a “golden share” agreement with Japan’s Nippon Steel in its takeover.
Reuters notes earlier this month, a lawsuit was filed by investors in two of TikTok’s social media rivals, seeking to reverse the approval of the deal.
Thanks to long-time Slashdot reader schwit1 for sharing the news.
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