US Government Axes Ant Financial/ MoneyGram Deal


If you’ve ever taken a Series 65 test, then you’ll remember the various forms of risk you needed to memorize – credit risk, country risk, forex risk, interest rate risk, political risk and market risk.  So (geo)political risk recently came into play on the huge proposed buyout of US-based MoneyGram by China’s mega-fintech Ant Financial, and the US government ultimately nixed the deal.  Now, another US firm – Euronet Worldwide – which first attempted a buyout of MoneyGram back in 2018 is once again looking to step into the bidding fray for its competitor.  Interesting times.
(Cindy Taylor)

“Nearly a decade after its first attempt, Leawood-based Euronet Worldwide Inc. may see another opportunity to acquire competitor MoneyGram International Inc.
Euronet launched a bidding war in March to acquire MoneyGram but ultimately was outbid by a $1.2 billion offer from Chinese fintech company Ant Financial, an affiliate of Alibaba Group.

“The first time Euronet made a bid for MoneyGram was in 2008. It really has been roughly 10 years of on-again, off-again discussions,” said Peter Heckmann, senior vice president and research analyst with DA Davidson & Co.

MoneyGram (Nasdaq: MGI) and Ant Financial dropped the deal Tuesday after failing to get approval from the Committee on Foreign Investment in the United States, due to concerns about whether the Chinese government would be able to access users’ financial data. Euronet’s (Nasdaq: EEFT) stock increased nearly 5 percent after the announcement from $85.16 at close Tuesday to $89 at open Wednesday.

In a release, MoneyGram CEO Alex Holmes noted that “the geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago.”

Now, the door is open again for Euronet to make an offer for MoneyGram. On Wednesday, Euronet stated that it “continues to believe there is compelling commercial logic” to a combination with MoneyGram. However, the company added that “significant developments” were disclosed by MoneyGram in the past year that Euronet has not evaluated…”

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