Trump administration to be paid $10bn for brokering TikTok deal

"Trump has previously said that the US will get a tremendous fee-plus—I call it a fee-plus—just for making the deal and I don't want to throw that out the window. The president signed an executive order in September approving the deal, amid bipartisan concerns that TikTok's Chinese ownership posed a national security threat given the platform's popularity among Americans."

"A government taking a transactional fee for a deal between private businesses is exceptionally rare and the $10bn amount appears much larger than the roughly 1% slice that investment bankers take in such circumstances. JD Vance has said the US version of TikTok is valued at about $14bn, meaning the fee taken by the government is closer to 70% of the deal."

"It's owned by Americans, and very sophisticated Americans, Trump said at the signing of the order. This is going to be American operated all the way. Under the agreement, TikTok will be able to fully operate in the US although investors will have to share profits with ByteDance."

The Trump administration is set to receive $10 billion from investors who acquired TikTok's US operations from Chinese parent company ByteDance. The investors—Oracle, MGX, and Silver Lake—already paid $2.5 billion to the US treasury when the deal closed in January, with additional payments continuing until reaching $10 billion total. This arrangement represents an exceptionally rare government transaction fee, significantly larger than typical investment banking fees of roughly 1%. Given that TikTok's US version is valued at approximately $14 billion, the government fee represents nearly 70% of the deal value. Trump approved the deal through an executive order in September, citing national security concerns about Chinese ownership of the popular platform. Under the agreement, TikTok operates fully in the US while investors share profits with ByteDance.

Read at www.theguardian.com