The deal by Walmart (WMT) - Get Report and Oracle (ORCL) - Get Report to acquire up-and-coming social-media app TikTok is on hold indefinitely, pending the Joe Biden administration's review of related security matters, a media report says.
The deal is on hold as the administration reviews national-security concerns about Chinese tech companies, people familiar with the matter told The Wall Street Journal.
Donald Trump, Biden's predecessor, took a hard line toward China, forcing a security review of the company and placing a Nov. 12 deadline by which TikTok's parent, ByteDance, had to divest its U.S. operations.
"We believe a Biden White House will take a much softer tone going forward in the eyes of the Street and potentially change the course of the decoupling path going on between the two powerhouse countries over the coming years," said Wedbush analyst Dan Ives.
The deal, which was driven by the former president's insistence on decoupling TikTok's U.S. operations from China, has floundered amid legal challenges from ByteDance.
Ives calls Biden's next moves on TikTok a potential "litmus test" for the administration and the U.S. attitude toward its biggest global rival.
"It is very likely that ByteDance (and its Board) decide to go ahead with this deal once it goes through a White House and CFIUS review and eliminate any lingering security concerns around the TikTok platform going forward with 100 million users and growing to capitalize on its future success," Ives said.
The Committee on Foreign Investment in the U.S. is a Treasury Department arm that reviews cross-border deals for security risks.
At last check shares of Walmart, the Bentonville, Ark., retail giant, were off 0.2% at $145.61. Oracle, the Austin software major, was little changed at $63.73.