The retail giant Walmart will joint hands with Microsoft in a bid to purchase the United States operations of TikTok.
This was confirmed by the retailer to the media, saying that it is interested in purchasing the tech company.
The news sent shares of Walmart up more than 3%.
According to reports quoting sources, an agreement for the sale of the US, Canadian, Australian and New Zealand operations of TikTok and the deal is expected to be valued anywhere between $20 billion and $30 billion. Reports claimed that a buyer for the short video sharing app has not been finalized as yet but the announcement of the deal is set to come in days.
Apart from Microsoft and now Walmart, there are other companies that are interested in buying the app including Oracle.
This move by Walmart is times with the company trying to compete better with the e-commerce company Amazon. A membership program called Walmart+ is to be launched by the company soon. Analysts s this new service as a direct competition to Amazon Prime which has original TV shows and movies.
While acknowledging the buzz around the membership program, CEO Doug McMillon in Walmart’s recent earnings call, no details of when the service would be launched or the perks that would be offered to make the service stand out as provided by him.
Deliveries for customers would be speed up by the program through services such as curbside pickup and delivery, strengthen relationships with customers and gather valuable customer data, he said.
Reports quoting sources said that Walmart had previously tried to work out a bid for TikTok with Softbank but that bid was resisted by the US government since no cloud technology backbone component was included in the proposed deal.
Walmart could now be in a better position to place a bid for the Chinese owned short video sharing app because of the association of Microsoft.
A five-year cloud deal with Microsoft was entered into by the retailer two years ago according to which the retailer was to adopt Microsoft’s Azure cloud infrastructure and a bundle that includes the Office 365 productivity applications.
TikTok’s integration of e-commerce and advertising “is a clear benefit to creators and users in those markets”, said the big-box retailer in a statement.
It did not say how it would use TikTok or whether it would be part of Walmart+.
“We believe a potential relationship with TikTok US in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses,” it said. “We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators.”
(Adapted from CNBC.com)