U.S. Blocks Chinese Internet Giant Alibaba's Purchase of MoneyGram

author: Selina Cheng   

The U.S. government officially rejected Ant Financial's plan to acquire U.S. money transfer company MoneyGram International Inc. (Nasdaq: MGI) on Tuesday, citing national security concerns. The proposed $1.2 billion acquisition is the most high-profile Chinese deal to be rejected by Washington since Donald Trump took office. 

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

Though the acquisition is not blessed by the U.S. government, MoneyGram and Ant Financial announced they plan to work together on new strategic initiatives in the remittance and digital payments markets.

Doug Feagin, President of Ant Financial International said, "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."

Ant Financial Services Group, formerly known as Alipay, is affiliated with the Chinese internet giant Alibaba Group (NYSE: BABA). Ant Financial is considered the biggest FinTech company in the world as it controls Yu'e Bao, a $235 billion fund, the world's largest money-market fund.