Jack Ma’s Ant Financial buys MoneyGram

Jack Ma's Ant Financial buys MoneyGram for a reported $880 million.

In big news circulating out of China and the US, Jack Ma’s Ant Financial buys MoneyGram for a reported $880 million

A big deal in the international payments world has been agreed on as the former Alibaba affiliate Ant Financial buys MoneyGram International. The deal gives Ant Financial a platform for expanding its services to many other parts of the world and will connect MoneyGram’s network of over 2 billion accounts with Ant Financial’s massive customer base of 630 million.

According to reports, Ant Financial will pay $13.25 per share for the NASDAQ-listed MoneyGram, which is above the $11.88 price it held at the beginning of trading on Wednesday. MoneyGram stock has doubled since late October amidst speculation of the purchase.

Eric Jing, CEO of Ant Financial, said in a statement “The combination of Ant Financial and MoneyGram will provide greater access, security and simplicity for people around the world to remit funds, especially in major economies such as the United States, China, India, Mexico and the Philippines,”

Like other previous Chinese acquisitions of US companies, the deal is expected to face harsh scrutiny by regulators including the Committee on Foreign Investment, which has previously prevented some China-related deals on security grounds. The purchase of MoneyGram comes at a time of rising trade tensions between China and the US.

MoneyGramIf US authorities approve the MoneyGram deal, it will be Ant Financial’s second acquisition in the US. The company purchased Missouri-based EyeVerify in a $70m deal in 2015.

As Ant Financial buys MoneyGram, it marks a change of guard in the international money transfer world. The US-based money transfer company along with Western Union has dominated the global money transfer industry for many years.

The purchase also shows the continuing rise of Chinese fintech unicorns and the central role China plays in the global fintech industry. A recent Citigroup report on digital disruption found that China has now overtaken the U.S. to claim the No. 1 spot for investments in fintech.

Ant Financial is controlled by Chinese Billionaire Jack Ma who is currently founder and executive chairman of the Alibaba Group.

More here [bloomberg] [ft]


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