Alibaba affiliate Ant Financial nears deal to buy MoneyGram
Jan 27 2017
Ant Financial Services Group, part of the fast-growing Alibaba Group and parent of AliPay, has entered into a definitive agreement to purchase MoneyGram at $13.25 per share or a valuation of $880 million.
The acquisition is a drop in the bucket for Ant Financial, which has a $60 billion valuation and raised $4.5 billion just past year.
There were even rumors that MoneyGram could wind up combining with its rival Western Union. The company invested $680 million in Indian e-commerce and payments player Paytm in September 2015 and a 20 percent stake in Thailand's Ascend Money, an e-payment services and micro-loans provider in November 2016.
The transaction is subject to approval of MoneyGram's stockholders and regulatory approvals.
Shares of Alibaba, however, decreased 1.77% to $102.29 per share in midday trading on Thursday. But a deal could help shield the money-transfer business from the potentially adverse effects of President Trump's policies.
But Jing didn't shy away from the fact that MoneyGram is a major player in remittances from the U.S.to Mexico.
Formally known as Zhejiang Ant Small & Micro Financial Services Group Co, the Chinese company has begun making investments overseas, notably in India and Southeast Asia, to take its model of online finance and local services to emerging markets.
Trump and Mexican President Enrique Pena Nieto are now scheduled to meet in Washington on January 31.
MoneyGram already has a thriving remittances business.
CFIUS, the obscure agency within the Treasury department that's tasked with evaluating foreign acquisitions of USA assets, is likely to get a larger role under the Trump administration.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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