Alibaba`s Ant Financial made an attempt to acquire global payment service MoneyGram, but the US Government blocked the deal valued at the sum of $1.2 billion.
Alibaba`s Ant Financial made an attempt to acquire global payment service MoneyGram, but the US Government blocked the deal.
Alibaba`s affiliate that controls China`s top mobile wallet Alipay, Ant Financial, announced its decision to buy Nasdaq-listed MoneyGram in April 2017. The company bid for MoneyGram in January 2017 in an effort to develop its cross-border payment network into the US, India, and the Philippines.
The President of Ant Financial, Doug Feagin, told Tech Crunch that establishing a new strategic cooperation with MoneyGram would add a partner with global remittance capabilities. The goal was to make Ant Financial`s platform more accessible, especially to unbanked and underserved communities on a global scale, as he elaborated in the interview.
However, the US Government did not approve the proposed acquisition that was valued at $1.2 billion. A governmental panel formed by the Committee on Foreign Investment in the United States (CFIUS) gathered to discuss the deal last Tuesday and rejected it over national security concerns.
“Despite our best efforts to work cooperatively with the U.S. government, it has now become clear that CFIUS will not approve this merger.”, according to MoneyGram Chief Executive Alex Holmes who released a statement on Tuesday.
The US government has reportedly taken a tough stance towards the sale of companies to Chinese entities, especially in light of the American current foreign policy related to the North Korean issue.
Following the deal`s failure, Ant paid $30 million to MoneyGram for terminating the acquisition process per terms of the agreement. MoneyGram`s share price dropped by 8.5 percent after the market trading, as reported by Reuters.
Arrangements reached by Ant Financial and MoneyGram that do not involve a transaction would not be reviewed by CFIUS.