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US-China: Fallout over Alibaba’s Ant Financial Moneygram loss

 |  January 7, 2018

The news most recently, and most urgently, has been that the Trump administration gave the thumbs-down to the $1.2 billion overture under which Ant Financial, the Alibaba affiliate, would have bought U.S.-based MoneyGram International.

The deal was scuttled through the scrutiny of the Committee on Foreign Investment in the United States, which looks at buyouts of U.S. firms proposed by foreign entities. The peril? Security concerns – specifically data tied to millions of accounts.

Consider the fact that, on the table at the time, was the idea that one million U.S. firms would be able to leverage access through Alibaba to reach the coveted Chinese consumer.

In an interview with PYMNTS’ Karen Webster after the deal announcement, Alex Holmes, MoneyGram CEO, stated that “there are millions of Chinese living outside of the mainland, and whether those are students or people traveling or permanent residents living outside the country, we are excited to integrate our product and capabilities into China – especially when combined with our full connections in the rest of the world. We think that this will allow us to grow a very robust send market [in China].”

But this week, the peril as seen by lawmakers seemed to outweigh the promise as seen by the firms themselves. With the announcement that the deal was off the table, we should likely assume that this is a roadmap, of sorts, for how things might go – a roadmap that leads straight to a dead end.

The MoneyGram bid is among the highest of the high-flying deals to end ignominiously, chiefly because of the marquee name involved in eCommerce – that would be Alibaba, of course – and the reach that would have been cemented should MoneyGram have come under its considerably far-flung portfolio.

Full Content: Pymnts

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