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.
Â
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.
Â
“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.
Â
“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.
Â
As per the agreement, Ant has paid $30 million to MoneyGram for terminating the acquisition process.
Â
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.
Â
Tags:Â US Government, MoneyGram, Alibaba, Ant Financial, alibaba ant financial, MoneyGram CEO Alex Holmes, Doug Feagin, President Ant Financial International, varindia,Â
