Walmart wanted to be majority owner of TikTok, and was teamed up with Alphabet and SoftBank before Microsoft

Walmart and Microsoft might seem like an unlikely partnership to acquire TikTok’s U.S. assets, but until very recently the retailer had other plans.

Before teaming up with Microsoft in recent days, Walmart was part of a consortium put together by SoftBank Chief Operating Officer Marcelo Claure, which also included Google parent company Alphabet, according to people familiar with the matter. 

SoftBank’s Claure felt Walmart’s all-American image and Google’s cloud computing infrastructure backbone could be a way in for the Japanese technology company, which has specialized in buying young, high-flying technology companies in recent years, including Uber and WeWork, said the people, who asked not to be named because the discussions were private. The deal structure would have had Walmart as the lead buyer, with SoftBank and Alphabet acquiring minority stakes. One or two other minority holders held talks to join the consortium, two of the people said.

Walmart wanted to be the exclusive e-commerce and payments provider for TikTok and have access to user data to enhance those capabilities, one of the people said. But the people said the U.S. government wanted the lead buyer of TikTok to be a technology company because that would better fit with its national-security rationale for forcing Chinese owner ByteDance to divest TikTok’s U.S. operations.

Walmart confirmed its partnership with Microsoft Thursday, releasing a statement stating its interest in TikTok’s e-commerce and advertising capabilities.

“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.”

Alphabet, which also owns YouTube and could face significant antitrust opposition if it acquired TikTok’s U.S. assets, was primarily interested in TikTok as a new cloud computing customer, and felt it was not in a position to lead the deal, the people said. That caused the consortium to fall apart last week and led Walmart, which had become increasingly convinced that TikTok fits into its strategy, to partner with Microsoft on a bid instead.

Microsoft had little need for SoftBank as a partner, with a market capitalization of more than $1.7 trillion. Walmart’s red-state appeal and wide user base made sense as a partner both politically and financially, one of the people said. 

TikTok hasn’t decided between the Microsoft-Walmart bid and a rival offer from Oracle, according to people familiar with the matter. A deal, which is set to value TikTok’s U.S. operations in the $20 billion to $30 billion range, could be completed in the next 48 hours, according to people familiar with the matter.

TikTok, SoftBank and Alphabet declined to comment on the deal talks. 

WATCH: Why Walmart got into the TikTok bidding war.