Ant Financial to acquire MoneyGram in US$880 million deal

Lucy Hill
January 27, 2017

Alipay parent company Ant Financial has entered into a "definitive agreement" to acquire money transfer services provider MoneyGram for about US$880m.

Riding on the momentum of successful mobile monetization amongst Chinese users, Ant Financial already has a wide global reach which serves itself particularly well when Chinese tourists travel overseas and utilize its payment services. Ant Financial will also assume or refinance MoneyGram's outstanding debt, which stood at $937.3 million for the quarter ended on September 30, according to the company's latest financial statement. The company has been active in the acquisitions space, buying EyeVerify, a US-based mobile eye recognition software firm, and it has invested in Yum Brands' (YUM) China operations. The company closed Wednesday's trading at $11.88 on a volume of 91,305 shares.

MoneyGram will remain headquartered in Dallas after the merger.

MoneyGram lets consumers and businesses send cash to one another, generating revenue from transaction fees and spreads on foreign-exchange rates.

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CBA struck a payment deal with Ant's Aliplay previous year.

The transaction has been approved by the MoneyGram board. MoneyGram's biggest shareholder, Thomas H. Lee Partners, which has a 44 percent stake in MoneyGram, has agreed to support the deal. The acquisition is expected to finish in second half of 2017.

"The combination of Ant Financial and MoneyGram will provide greater access, security and simplicity for people around the world to remit funds".

The transaction is subject to approval of MoneyGram's stockholders and regulatory approvals.

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