Thursday, January 4, 2018
MoneyGram is headquartered in Dallas; Ant Financial is based in Hangzhou, China. The merger, proposed in April 16, 2017, did not receive the requisite approval of the Committee on Foreign Investment in the Unites States. MoneyGram stock dipped about 9 percent Jan. 2, 2018, after the termination was announced. Ant will pay a $30 million termination fee for the breakup of the deal.
MoneyGram CEO Alex Holmes said that despite the companies' efforts to work cooperatively with the U.S. government, it became clear the CFIUS would not approver the merger. "The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago." He said. "We are disappointed in the termination of this compelling transaction, which would have created significant value for our stakeholders. The MoneyGram Board and management team greatly appreciate the significant time and energy that so many of our colleagues have devoted to trying to complete the transaction."
Industry observers stated the CFIUS' decision was affected by changing relations between China and the United States and hinged on concerns about national security, specifically cybersecurity and the need to safeguard critical, sensitive data.
Upon forming their new strategic business cooperation, the companies said they will "explore and develop initiatives to bring together their capabilities in remittance and digital payments to provide their respective customers with user-friendly, rapid-response and low-cost money transfer services into China, India and the Philippines, among other Asian markets, as well as in the U.S. and other key regions around the world."
Doug Feagin, President of Ant Financial International, added, "We remain excited and encouraged about Ant Financial's future prospects around the world as we continue to establish new partnerships and pursue opportunities that bring innovative services to our ecosystem. 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."
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.