US Government disapproves acquisition of MoneyGram by Alibaba's Ant Financial

The proposed acquisition of MoneyGram by Alibaba’s Ant Financial might come to a stop with the U.S. Government disapproving the $1.2 billion deal.

Ant Financial, the Alibaba affiliate announced the deal to buy Nasdaq-listed MoneyGram in April 2017. It initially bid for MoneyGram in January 2017 as a means to develop its cross-border payment network into the U.S., and major corridors including India and the Philippines.

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

“Establishing this new strategic cooperation with MoneyGram will add a partner with global remittance capabilities to our ecosystem and, while Ant Financial won’t have a direct ownership relationship with MoneyGram, we look forward to working closely with the MoneyGram team to make our platform even more accessible – particularly to unbanked and underserved communities globally – and create even better experiences for our customers,” added Doug Feagin, President of Ant Financial International.

As per the agreement, Ant has paid $30 million to MoneyGram for terminating the acquisition process.

MoneyGram’s share price dropped by around 10 percent to $12.02 after the news broke out. It however recovered to around $12.40 at later tradings.

Tags: US Government, MoneyGram, Alibaba, Ant Financial, alibaba ant financial, MoneyGram CEO Alex Holmes, Doug Feagin, President Ant Financial International, varindia,