The Western Union Company has formally scrapped its planned acquisition of International Money Express (Intermex) after failing to secure a key regulatory approval for the transaction.
The decision comes after the California Department of Financial Protection & Innovation (DFPI) delivered final approval conditions on 10 November, which Western Union deemed “unacceptable.”
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The remittance company said complying with the requirements would have necessitated operational adjustments to its core business model, retail agent network agreements, and corporate strategy. Western Union concluded that accepting these terms did not serve the “best interests” of the business, its agents, or its shareholders.
Following consultations with legal and financial advisors, Western Union’s board of directors voted to cancel the transaction and delivered a formal notice of termination.
However, Intermex rejected Western Union’s termination of the merger agreement and demanded that Western Union take “all actions necessary” to complete the merger.
Under the provisions of the merger agreement, neither Western Union nor Intermex is obligated to pay a termination penalty, the money transfer firm added.
Western Union noted that the California regulator initially granted approval for the acquisition in February without the contested stipulations. The DFPI subsequently approved timeline extensions on 17 April and 31 July.
However, the agency rescinded its approval 13 days after granting the second extension. Western Union said this occurred without any meaningful change to its business or operations.
Prior to the dispute, the transaction had secured regulatory clearances from “every other jurisdiction”. These approvals covered 54 states, territories, and foreign countries, including merger clearance in the US and change-of-control filings in the UK and Spain.
Western Union President and CEO Devin McGranahan said: “While we are disappointed that we were unable to complete the acquisition on terms that were acceptable to Western Union, we believe this course of action is in the best interests of the company and its shareholders.
“We remain focused on executing our strategy and delivering long-term value for our customers, shareholders and other stakeholders.”
The company signed the agreement to acquire Intermex for an enterprise value of approximately $500m in August last year.
At the time, McGranahan said the purchase “strengthens our North America operations and expands our presence with key consumer segments across the US”.
