Western Union is reportedly planning to acquire MoneyGram International, a deal, if advances, will combine two largest money-transfer services in the US.
According to a Bloomberg report, Western Union has made an acquisition offer for MoneyGram. However, the decision is yet to be finalised, the report added citing sources familiar with the matter.
Also, Western Union and MoneyGram representatives did not confirm the development.
Following the report, MoneyGram stock increased 6.2% valuing the company at around $164m. Western Union shares jumped 3.5% boosting its market value to around $8.5bn.
Notably, Chinese financial services conglomerate Ant Financial Services Group agreed to acquire MoneyGram in 2017. However, the deal was abandoned due to concerns raised by national security regulators.
MoneyGram’s business is affected by the ongoing Covid-19 pandemic. The company was forced to suspend operations in several markets due to the pandemic related lockdown and other restrictions.
In the first quarter of this year, the money transfer service posted total revenue of $290.9m, a decline of 8% compared to the year-ago quarter.
During the three-month period, it registered a 57% surge in digital transactions accounting for 18% of all money transfer transactions. However, its Walk-In Channel witnessed a significant downturn.
In 2019, MoneyGram posted total revenue of $1.29bn, an 11% drop on a reported basis.