Ant
Financial, the digital payments arm of e-commerce giant Alibaba, is buying
US-based MoneyGram for $880m (£700m).
MoneyGram
has about 350,000 outlets in nearly 200 countries. Ant Financial has more than
630 million users.
The
takeover by the Chinese group will need regulatory approval from the US
Committee on Foreign Investment.
The
inter-agency committee reviews foreign acquisitions of domestic American assets
on grounds of national security.
Eric
Jing, chief executive at Ant Financial, said in a statement that the marriage
of the two companies will "provide greater access, security and simplicity
for people around the world to remit funds, especially in major economies such
as the United States, China, India, Mexico and the Philippines".
Ant
Financial has a big market share in the online payments industry in China. The
acquisition could help the company extend the lead as well as expand overseas,
as competition is growing in China with rival Tencent's WeChat payment system.
US-listed
Moneygram's shares rose by nearly 9% on the news. The takeover has been
approved by MoneyGram's board of directors.
Politics
over profits?
Ant
Financial's shopping spree in the US comes against a backdrop of rising
tensions between China and the world's biggest economy.
Before
he took office, then president-elect Donald Trump was questioning whether the
US should continue its "One China" policy, sparking fury from Chinese
state media. And during his presidential campaign, Mr Trump threatened to
impose punitive tariffs on Chinese imports.
But
Jack Ma, the founder and chairman of Alibaba, held a meeting with Mr Trump in
December last year.
While
President Trump has been critical of China, he said he had a "great
meeting" with Mr Ma, who chose to float Alibaba on the New York Stock
Exchange. The share sale in September 2014 was a record-breaker, as Alibaba
raised $25bn in its initial public offering.
If
the MoneyGram deal goes through, it will be Alibaba's second acquisition in the
US. Last year the e-commerce giant purchased EyeVerify in a $70m deal.
EyeVerify
is a start-up based in Missouri, which uses biometric authentication technology
for securing user's online data and transactions.
No comments:
Post a Comment