Moneygram-Ant Financial merger fails to clear CFIUS

The proposed merger between Dallas-based MoneyGram (the fund-transfer service) and China’s Ant Financial Services Group has failed to obtain required approval from CFIUS, the companies announced in a joint press statement on 2 January. They have now mutually agreed to terminate their agreement ‘despite extensive efforts to address the Committee’s concerns.’

MoneyGram CEO, Alex Holmes said: ‘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 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.’

This latest attempt to win CFIUS approval was the third since MoneyGram approved a circa $1bn takeover offer from Ant Financial last April. Ant Financial is run by Ali Baba billionaire Jack Ma. It is the world’s largest fintech company and is reported to have more than 500 million customers in China.

For an in-depth review of US and EU policy on foreign investment into sensitive industry sectors, see Trade Security Journal issue 5 (www.tradesecurityjournal.com)