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January 3, 2018updated 08 Jan 2018 8:14am

MoneyGram sale to Ant Financial blocked

By Patrick Brusnahan

The US has blocked the $1.2bn acquisition of money transfer firm MoneyGram to China-based Ant Financial.

The deal was rejected by the Committee on Foreign Investment in the United States (CFIUS) and is a blow to Ant Financial, the digital payments side of Alibaba, and its expansion into the US.

The CFIUS stated that the deal was blocked due to national security concerns. It is the highest profile Chinese deal to be rejected by Washington since Donald Trump was inaugurated as President.

In accordance with the merger agreement, Ant Financial will pay MoneyGram a $30m termination fee.

Jack Ma, Alibaba’s executive chairman, had previously promised to create one million jobs in the US.

Alex Holmes, Chief Executive Officer of MoneyGram, said: “The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago. Despite our best efforts to work cooperatively with the U.S. government, it has now become clear that CFIUS will not approve this merger.”

Other deals that have come across difficulties include the $1.3bn sale of US Lattice Semiconductor to Canyon Bridge Capital Partners, China Oceanwide Holdings Group’s $2.7bn purchase of US life insurer Genworth Financial, and Orient Hontai Capital’s $1.4bn deal for US mobile marketing firm AppLovin.

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