Sen. Mark Warner (D-Va.) has sent a letter to Treasury Secretary Scott Bessent questioning a $10 billion fee that TikTok's buyers reportedly paid the U.S. Treasury Department as part of their acquisition from China's ByteDance. The fee came on top of the $14 billion purchase price, bringing the total transaction value to $24 billion. Warner is asking how the fee was determined, approved, and how the money would be spent without violating the Anti-Deficiency Act.
The massive fee has raised eyebrows across the deal-making community. While typical M&A bankers charge 1-2% of a deal's value, the Treasury Department's fee represents over 70% of the original purchase price. The transaction was completed under pressure from U.S. law requiring ByteDance to divest TikTok, which sources say contributed to what appeared to be a fire-sale price.
Oracle and Silver Lake each acquired 15% stakes in the new TikTok U.S. entity, with ByteDance investors retaining nearly 20% of the carved-out business. Many of those investors are U.S. venture capital firms who may be frustrated by the unexpected additional cost. Oracle noted its equity investment in recent earnings reports but made no mention of any fee payment.
The Treasury Department, TikTok U.S., and Vice President Vance's office have all declined to comment on the fee arrangement. Other bidders who participated in the process may now question whether their failure to win was predetermined. The unusual fee structure and the silence from all parties involved has created new scrutiny around a deal that was already controversial due to national security concerns.