President Trump is keeping his campaign promise to put America first when it comes to overlooking potentially dangerous merger and acquisitions involving U.S. companies and foreign buyers.
Prior to the Trump administration, only 3 deals have been blocked in the last 27 years. Now, 2 deals to China have been halted within President Trump’s first year.
As reported by TechCrunch
The proposed acquisition of global payment service MoneyGram by Alibaba’s Ant Financial is off after the U.S. Government blocked the $1.2 billion deal.
Ant Financial, the Alibaba affiliate which controls Alipay — China’s top mobile wallet — and other financial services, announced a deal to buy Nasdaq-listed MoneyGram in April 2017 after it beat off a rival bid from Euronet. Ant initially bid for MoneyGram in January 2017 as a means to develop its cross-border payment network into the U.S., and major corridors including India and the Philippines, but instead it will “explore and develop initiatives” to collaborate with MoneyGram’s business.
“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 [Committee on Foreign Investment in the United States] will not approve this merger,” MoneyGram CEO Alex Holmes said in a statement.
“Establishing this new strategic cooperation with MoneyGram will add a partner with global remittance capabilities to our ecosystem and, while Ant Financial won’t have a direct ownership relationship with MoneyGram, we look forward to working closely with the MoneyGram team to make our platform even more accessible – particularly to unbanked and underserved communities globally – and create even better experiences for our customers,” added Doug Feagin, President of Ant Financial International.
Per terms of the agreement, Ant has paid $30 million to MoneyGram for terminating the acquisition process.
MoneyGram’s share price dropped by around 10 percent to $12.02 on the news, before recovering to around $12.40 in out-of-hours trading at the time of writing.
The collapse of the deal marks a second China-led acquisition of a U.S. tech company to have failed during U.S. President Trump’s tenure. Back in September, a private equity group was blocked from purchasing Lattice Semiconductor due to potential security risks. Prior to the Trump administration, just three deals had been blocked over the past 27 years.