Having received approval from the Reserve Bank of India, the companies now expect the previously announced transaction to close on or before June 1, MoneyGram said in a Thursday (May 4) press release.
“Today, the parties received approval from the Reserve Bank of India,” MoneyGram said in the release. “As a result, all money transmission regulators in all applicable domestic and international jurisdictions have now provided their approval or non-objection of the transaction. All other regulatory conditions to closing had previously been met.”
MoneyGram and Madison Dearborn Partners, a venture capital firm, will now work to finalize all other pre-closing activities, according to the release.
MoneyGram stock leaped 13% Thursday upon news of the approval.
Investors had been feeling uncertain about MoneyGram as a deadline neared for its planned sale and the Reserve Bank of India had not yet given its regulatory approval to the deal.
On Friday (April 28) MoneyGram pushed back the expected date of its planned sale, saying in its quarterly report released that day that the company and the intended buyer expected to close the merger “late in the second quarter of 2023.”
Earlier, MoneyGram had said in an update on the planned sale released in January that the closure of the merger transaction was expected at the end of the first quarter or early in the second quarter.
In the quarterly report released Friday, the company attributed the delay to its waiting for final regulatory approval from the Reserve Bank of India, which is the issuer of MoneyGram’s Money Transfer Service Scheme (MTSS) license in India.
MoneyGram said the process was taking longer than originally anticipated because the merger would be one of the first payment system operators (PSO) undergoing a sale since the Reserve Bank of India issued a new circular covering approval requirements related to PSO.
MoneyGram announced the planned acquisition by Madison Dearborn Partners — for $1.8 billion — in February 2022.
“By partnering with MDP and becoming a private company, we will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings while leveraging our global platform for new customers and use cases,” MoneyGram CEO and Chairman Alex Holmes said at the time.