- The two money transfers companies failed to get approval from CFIUS
- $300m termination fee resolved between Ant Financial and MoneyGram
Originally intended to simplify buying and selling across borders, a proposed merger between US-based money transfers firm MoneyGram and the parent company of China’s Alipay, Ant Financial, has been officially abandoned.
It has been stated that although the plans for integration have been nixed, the two international money transfers companies will continue to work in collaboration on initiatives and developments in the digital payments, remittance, and fintech markets.
The merger was terminated when it emerged that the necessary approval from the Committee of Foreign Investment in the United States (CFIUS) was not forthcoming.
A $300m termination fee was paid by Ant Financial to MoneyGram in accordance with the original agreement between the two parties.
The merger was announced a year ago with the objective of connecting MoneyGram’s international money transfers network of approximately 2.4 billion mobile and bank accounts with Ant Financials records of over 350,000 user locations. At the time, officials at Ant Financial stated that the partnership would “provide consumers in over 200 countries and territories with convenient and accessible financial services, which furthers Ant Financial’s mission to promote equal access to financial services globally.”
The Wall Street Journal predicted that the deal would have meant that Alipay would garner an immediate influence in the American market as a result of the $1.2bn deal, while it would also benefit from marketing its services to existing customers of MoneyGram in the US.
It was reported that MoneyGram and PayPal held talks in 2012 to secure a similar partnership. The agreement between the payments giant and MoneyGram would have meant users of MoneyGram would be afforded the opportunity to fund their PayPal accounts with money at over 240,000 global locations established by MoneyGram. Similarly, the collaboration never materialised.