Ant Financial’s ambitions to take over US payments giant MoneyGram International have been thwarted by a US government panel that has rejected the purchase on national security grounds.
Chinese online payments giant Ant Financial, an affiliate of Jack Ma’s Alibaba Group, hoped to abet its global expansion plans via the acquisition of MoneyGram, and took pains to outbid rival suitors in 2017.
The deal has nonetheless met with stiff stateside opposition, given the national security implications of a Chinese Fintech concern taking over a major player in the international payments sector.
Lawmakers noted that MoneyGram has established facilities close to certain US military bases, and is frequently used by servicemen to remit furs back home, potentially providing a useful source of security intelligence to the Chinese government.
While Ant Financial and MoneyGram submitted measures to shore up data security, the Committee on Foreign Investment in the United States (CFIUS) rejected these proposals on Tuesday, prompted both parties to terminate the deal.
“Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger,” said Alex Holmes, MoneyGram Chief Executive.
The Ant Financial-MoneyGram deal is the latest and largest in a string of proposed Chinese acquisitions scuppered by CFIUS.
CFIUS recently blocked the slated $1.3 billion purchase of chip manufacturer Lattice Semiconductor Corp by China-investeed fund Canyon Bridge Capital Partners.
Ant Financial and MoneyGram said that they will continue to cooperate on remittance and digital payments in countries including China, India, the Philippines and the United States.