US restricts sale of Moneygram to China’s Ant Financial

Company - Mohit Shah - Jan 04,2018

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us restricts sale of moneygram to chinas ant financial

The United States has choked the deal for money transfer firm Moneygram worth $1.2bn (£880m) to China's Ant Financial, Alibaba’s digital payments wing.

The deal comprising the takeover of U.S. money transfer company MoneyGram International Inc. (MGI.O) by China’s Ant Financial has warped on Tuesday. This decision was announced after a U.S. government panel disallowed it due to national security concerns. After Donald Trump coming to power, this is the most eminent Chinese deal to be wrecked.

According to the firms, regulators supervising foreign investments in the US had snubbed to support the acquisition.

Alibaba, which owns Ant Financial has been in a state of shock after this declaration. Jack Ma, Alibaba's billionaire executive chairman had promised President Trump that he would contribution to the creation of million US job; however, this deal collapse has turned the table quite significantly.

On Tuesday, MoneyGram Chief Executive Alex Holmes said in a statement, “Despite our best efforts to work cooperatively with the U.S. government, it has now become clear that CFIUS will not approve this merger”.

It has been noted that, the U.S. government has fortified its stance over the sale of companies to Chinese firms. This is happening during a time when Trump is aiming to pressurize China to assist in confronting North Korea’s nuclear desires.

As per a Chinese Foreign Ministry spokesman, support on economic and trade matters was seen as a mutual benefit for both the nations. This statement was released on Wednesday when asked about Beijing’s view in relation to the deal rejection. The spokesman added, there are hopes that U.S. can frame a “fair and predictable environment” to accommodate Chinese enterprises for investing and planning start-up businesses.