China’s Ant Financial drops plan to merge with MoneyGram

SAN FRANCISCO (Jan 3): Ant Financial Services Group abandoned its plan to merge with MoneyGram International Inc. after the companies failed to win approval from the Committee on Foreign Investment in the US, a national-security panel that has become more active in blocking Chinese investments in American companies.

MoneyGram shares plunged as much as 17% in extended trading to US$11 ($14.62) on the news. The companies instead plan to work together on strategic initiatives in the remittance and digital-payments markets, they said in a joint statement on Tuesday. Last year, Ant Financial offered US$18 a share in cash for Dallas-based MoneyGram, valuing the deal at US$1.2 billion. Ant paid MoneyGram the US$30 million termination fee that was part of the agreement.

“The geopolitical environment has changed considerably since we first announced the proposed transaction,” MoneyGram Chief Executive Officer Alex Holmes said in the statement. “Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger.”

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