The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Jeffrey Goldfarb

NEW YORK, March 16 (Reuters Breakingviews) - From casino magnate to meat peddler, Donald Trump has tried many occupations. His latest, however, is an ominous one for Wall Street. More than five years after the president first pitched the idea of selling TikTok's U.S. business, his administration is collecting a $10 billion payment for helping arrange the deal. Investment bankers will fear the financial reward as much as they envy its size.

After threatening to shut down the popular social media app owned by China's ByteDance back in September 2020, Trump endorsed a deal to hand 20% of it to cloud computing giant Oracle ORCL.N and mega-retailer Walmart WMT.O. The idea sat in limbo until last September, when Oracle, buyout shop Silver Lake and Abu Dhabi's MGX agreed to take control of TikTok in the United States, ostensibly for national security reasons, with the president touting a "tremendous fee" for brokering the transaction. In January, the new owners paid the first 25% of a $10 billion tab to the Treasury Department, the Wall Street Journal reported on Friday.

The sum is striking for many reasons. Vice President JD Vance, whose earlier foray into venture capitalism was backed by renowned tech investor Peter Thiel, pegged the American version of TikTok's worth at $14 billion. On that basis, the fee equates to 70% of the transaction value, more than 70 times the typical M&A commission. U.S. dealmakers including JPMorgan and Goldman Sachs last year collectively earned a grand total of about $25 billion for their advice, the second-biggest payday after 2021, according to LSEG. Trump is collecting 40% of that amount at once.

Calling the $10 billion payment a "fee" is dubious given the opacity that envelops a variety of corporate donations and transfers during this highly transactional presidency. Just last week, Democratic lawmakers raised questions about millions of dollars pledged by media companies such as film studio Paramount and Elon Musk's X to Trump's library after the fund overseeing it was dissolved. His inaugural committee, pet projects like a new White House ballroom, and groups including America250 have raised large sums of money, too.

For CEOs and their advisers contemplating acquisitions, the extra 10-figure expense in the TikTok transaction points to pricier M&A meddling from Washington. Although ByteDance had strong incentives to strike a deal, Nippon Steel 5401.T, Nvidia NVDA.O and Intel INTC.O are among those that have unexpectedly found the president at the negotiating table. Investment bankers insist that their expert advice adds value for clients, but the cost of the adviser-in-chief's involvement is getting more unseemly and exorbitant.

Follow Jeffrey Goldfarb on X and Linkedin.

CONTEXT NEWS

Investors taking control of TikTok’s US business will pay about $10 billion to the Trump administration as a fee for the government’s assistance in arranging the deal, the Wall Street Journal reported on March 13, citing unnamed sources.

Private equity firm Silver Lake, Abu Dhabi investor MGX and cloud computing giant Oracle are among the new owners that paid the first $2.5 billion installment to the Treasury Department when the transaction closed in January, according to the newspaper.

(Editing by Peter Thal Larsen; Production by Maya Nandhini)

((For previous columns by the author, Reuters customers can click on GOLDFARB/jeffrey.goldfarb@thomsonreuters.com))