Chinese ByteDance has 6 months to sell app

A forced sale of TikTok within 180 days as required by legislation passed by the House of Representatives U.S, would be one of the most complex and thorny transactions in corporate history. This is because it would end up facing financial, technical and geopolitical challenges that could make the sale impractical. Furthermore, it may increase the likelihood of a nationwide ban on the app.

The sale would require the separation of a company potentially valued at $150 billion from its technical infrastructure. Furthermore, it is the target of legal challenges and resistance from Chinawho promised to block any agreement.

Defenders of the project argue that it is not a ban. But practical difficulties would increase the chance that the TikTok fails to meet the six-month divestment deadline. As a result, it could be blocked for its 170 million users across the country.

“The amount of transaction complexity is extreme”he said Lee Edwards, former mergers and acquisitions partner at the law firm Shearman & Sterling. So much so that it refers to a technical term for a complicated agreement with uncertain prospects.

The possibility of owning an internet gem has spurred wealthy suitors into action. Former Treasury Secretary, Steven Mnuchinwho runs a private equity fund, said he was bringing together a group of investors in hopes of buying the TikTok.

However, a sale of TikTok would likely face a series of “aggressive legal challenges” that could further slow the process, said Wedbush Securities research analyst, Dan Ives.

TikTok in a delicate geopolitical scenario

Furthermore, a sale of TikTok could provoke retaliation against US companies in China, with Beijing having adopted a “tit for tat” approach in the past. The geopolitical scenario makes TikTok’s fate in the coming months even more uncertain.