Twitter (TWTR) is said to have held preliminary talks to acquire TikTok’s US operations, as the video-sharing app continues to hold talks about a sale with Microsoft.
It comes as US and China’s tech war hit new lows after president Donald Trump banned US companies from doing any transactions with the owners of TikTok and WeChat.
According to a report by the Wall Street Journal, it is not yet clear whether Twitter will pursue a deal with TikTok.
Microsoft (MSFT) has been negotiating an acquisition for weeks with TikTok’s Beijing-based owner Bytedance. With the tech giant considered to be a front-runner for any deals TikTok agrees.
The deal is thought to involve selling off TikTok’s operations in the US, Canada, Australia and New Zealand, to avert a ban of the app on American shores.
After initially saying he “wouldn’t support a deal,” Trump set a deadline for TikTok to find a buyer for its US arm or face a ban, following a conversation with Microsoft’s chief executive Satya Nadella.
But, Twitter might run into troubles, as the social media company is much smaller than tech giant Microsoft — with a valuation of close to $30bn (£23bn), almost as much as the valuation of Tiktok’s assets to be divested. Microsoft on the other hand, had a market capitalisation of $1.6trn on Friday.
The company reasoned that due to its size it would face less antitrust scrutiny as Microsoft or other bidders, according to people close to the matter.
With Twitter having much less financial firepower, the social media platform would almost certainly need help from investors to raise funds for the sale. It would also likely struggle to outbid Microsoft and complete a deal within the 45-day deadline set by Trump.
On Friday, Trump singed executive orders against TikTok and Chinese messaging app WeChat, effectively banning US firms from working with them after 15 September, on grounds of national security fears.
In retaliation to the move, TikTok has threatened legal action against the order, saying it would “pursue all remedies available” to “ensure the rule of law is not evaded.”