Investments

Ant Financial Resubmits MoneyGram Bid to U.S. Authorities

Alibaba Holding affiliate Ant Financial has resubmitted its bid to buy U.S. money transfer company MoneyGram to U.S. authorities for review.

Reuters, quoting unnamed sources familiar with the matter, said the $1.2-billion deal is being refiled with the Committee on Foreign Investment in the United States (CFIUS), which is the government entity that is charged with reviewing cross-border deals where U.S. firms are acquired, and where there may (or may not) be national security risks.

The refiling comes as both Ant Financial and MoneyGram were not yet able to secure clearance from CFIUS within what is a typically allotted 75 days that are in place when deals are being considered.  The refiling now, as Reuters reported, “resets the clock” and gives another 75 days for applications to be re-examined.  Within that 75-day timeframe, firms have time to work with the panel to address any outstanding security issues.

As has been widely reported, Ant Financial had been in a brief bidding war for MoneyGram with Euronet, and raised its offer to the $1.2-billion price tag. In the wake of that agreement, some members of Congress and others on Capitol Hill have expressed concern that information and data belonging to U.S. consumers and companies could be exposed via the cross-border nature of the deal, as Ant Financial would look to build out its reach beyond Asia.  Countering that concern, Ant has said that data infrastructure will remain in place in the U.S, offering protection of that data.   Other hurdles in the U.S. that must be satisfied include the fact that 46 states, at a minimum, have to grant money transmitter licenses to Ant before the deal is completed (that approval is in place in 23 states so far, Reuters said).

In a statement, Ant Financial said, “We are not commenting on the CFIUS process, but we are continuing to work with the various regulatory agencies and remain focused on closing the transaction by the end of the year.”

It should be noted that the refiling of the application does not in fact mean that a deal has been rejected or is in danger of being scuttled.  The newswire said that relatively more deals have been filed with the CFIUS as several positions there have yet to be filled by the Trump administration.  At the end of last month as many as 120 deals have filed similar notices with CFIUS, which is a record, as estimated by Covington & Burling LLP.  That compares with a total tally for 2013 of fewer than 100 transactions.

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