SV&C, JF Work Collapsed Chinese Bid for MoneyGram

Elias Hubbard
January 13, 2018

The proposed acquisition of global payment service MoneyGram by Alibaba's Ant Financial is off after the U.S. Government blocked the $1.2 billion deal.

In 2017, Ant Financial tried to expand its global footprint, by buying US money transfer company MoneyGram in a $1.2 billion deal.

Trump told reporters that he and Ma had a "great meeting" and would do great things together.

They did not elaborate further, though analysts have said that CFIUS might be concerned about protection of data relating to the millions of users of MoneyGram, a leading provider of money transferring services.

Moneygram chief executive Alex Holmes said he was disappointed by the outcome and noted the "geopolitical environment has changed considerably" in the year since the deal was announced.

"The regulatory uncertainty will certainly make Chinese buyers further head for other countries such as Germany, the United Kingdom and Israel for foreign assets", said one China-focused M&A lawyer at a global law firm, who did not wish to be named because he was not authorised to speak with the media. But despite "extensive efforts" to address the concerns of the CFIUS, the companies could not obtain the required approval and the deal was mutually terminated today. "Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger", MoneyGram CEO said in a statement.

The CFIUS, which reviews all foreign takeovers of U.S. firms with potential national security concerns, has squashed a number of Chinese purchases of USA businesses in recent years, as concern grows in Washington about selling critical technology to China. However, Ant Financial has also revealed that it will also pursue alternative opportunities having failed to acquire Moneygram.

Ant Financial had to raise its bid by 36% in order to counter an unsolicited bid from Kansas-based electronic payments company Euronet. In November, the buyout firm Orient Hontai Capital dropped a $1.4 billion bid for AppLovin, a USA mobile marketing group, because of push back from CFIUS. The potential deal was first announced in January 2016. The charm offensive that Ma began soon after Donald Trump's election, and continued through 2017, clearly didn't help dispel the distrust of China that's taken hold in Washington-and looks set to deepen this year.

Randall Stephenson's AT&T was one of the biggest donors to Trump's inauguration but still saw the Department of Justice sue to stop AT&T's $85 billion merger with Time Warner.

Other reports by Click Lancashire

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