Ant Financial blocked from buying MoneyGram

CFO Innovation editors
08 Jan 2018

Ant Financial's high-profile $1.2 billion bid to buy US-based money transfer service provider MoneyGram has failed after a US government panel rejected it over national security concerns.

The deal had been seen as Alibaba’s move to expand digital payment arm Ant Financial’s footprint overseas as local competition from Tencent's WeChat payment service in China continues to intensify.

"The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago,” said MoneyGram CEO Alex. “Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS (Committee on Foreign Investment in the US) will not approve this merger.”

While the deal has collapsed, MoneyGram and Ant Financial said they will explore and develop initiatives under a new strategic business cooperation to bring together their capabilities in remittance and digital payments.

The companies plan to provide their respective customers with user-friendly, rapid-response and low-cost money transfer services into China, India and the Philippines, and other Asian markets, as well as in the US and other key regions around the world.

As previously announced in April 2017, MoneyGram and Ant Financial entered into an amended merger agreement under which Ant Financial would acquire all of the outstanding shares of MoneyGram for $18 per share in cash.

In accordance with the Merger Agreement, simultaneous with termination of the agreement, Ant Financial paid MoneyGram a $30 million termination fee.

First published in CFO Innovation

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