New York [US], December 19 : TikTok has signed the deal backed by US President Donald Trump to sell its US assets to a group of American investors, CEO Shou Chew told employees in a memo on Thursday (local time), as per CNN.
Although the transaction is not yet complete, the move brings TikTok one step closer to securing its long-term future in the United States.
It comes after a law passed last year required that the US version of the app be spun off from its parent company, ByteDance, or be banned in the United States, CNN reported.
Trump signed an executive order on September 26 clearing the way for the completion of a deal to sell TikTok's US assets to a consortium of mostly American investors.
The order marked an important procedural step toward finalizing the TikTok sale, but the deal is not yet complete. Although both US and Chinese officials have signaled they are aligned on the deal's framework, it will still likely require regulatory approvals from both countries.
However, during the signing event, Trump said Chinese leader Xi Jinping had green-lit the deal and expressed confidence that it would be completed.
"I had a very good talk with President Xi," Trump said, referring to a phone call between the two leaders. "And we talked about TikTok and other things, but we talked about TikTok and he gave us the go-ahead" for the deal, as per CNN.
The executive order states that the deal constitutes a qualified divestiture as required by the ban-or-sale law that passed with strong bipartisan consensus last year. The US law, which went into effect in January, bans the app unless parent company ByteDance divests approximately 80% of its US assets to non-Chinese investors. Trump has repeatedly delayed enforcement of the law.
"I have determined that the proposed divestiture would allow the millions of Americans who enjoy TikTok every day to continue using it while also protecting national security," the order states. It adds that the deal to transfer control of TikTok's US assets will also apply to ByteDance's other popular platforms, Lemon8 and CapCut, as per CNN.