The Ant Financial – MoneyGram deal is still not completed. Ant Financial, the Chinese payments company, has twice previously submitted an application to purchase MoneyGram International for $1.2 billion. This was not approved, and now the company is resubmitting this application for US review.
This is not a hostile takeover, and both companies, MoneyGram and Ant Financial, have refiled the application. They are seeking clearance from the Committee on Foreign Investment in the United States (CFIUS). This is after previously being unable to secure such clearance within an assessment period after the first application was made.
Ant Financial is an affiliate of Alibaba Group Holding Ltd and the world’s most valuable fintech company. Ant Financial operates Alipay, the world’s largest mobile and online payments system. It also operates Yu’e Bao, the biggest money-market fund in the world.
The company was valued at $60 billion in January 2017, and analysts are predicting it to become worth more than $100 billion soon. Goldman Sachs is valued less than that, at $95 billion. Maybe the CFIUS are nervous of such a powerful Chinese company owning MoneyGram. Time will tell.
This is the company’s third attempt to get approval. It is close to the maximum 75 days allowed for assessing applications such as this. The company stated that is “continuing to work with the various regulatory agencies and remain focused on closing the transaction by the end of the year.”
CFIUS is a government committee whose job is to review US acquisitions by foreign companies to ensure that they are not potential risks to national security. The refile means that the deal is coming under more government scrutiny. More deals such as this must be resubmitted since President Trump took office.
The $880 million Ant Financial – MoneyGram deal was finalized in April. It beat US-based company Euronet Worldwide Inc. to it. Time will tell whether this offer has been successful. Both companies want it to go through without more fuss and bother.
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