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Ant Financial's acquisition of Moneygram blocked by White House

Ant Financial's acquisition of Moneygram blocked by White House”

The rejection comes despite Ma's attempts to form ties with the Trump administration; he visited Trump Tower in January of past year.

Ant Financial, an affiliate of Chinese internet titan Alibaba, has been forced to abandon a US$1,2 billion deal to buy U.S. remittances firm MoneyGram after failing to get approval from regulators in Washington. But the Committee on Foreign Investment in the United States, which decides whether a foreign investor can take control of a US business, never granted approval of the deal.

The failure is a setback to Ma's ambitions to expand into global markets.

Over the past decade, a quarter of all Chinese bids for US companies by value have been withdrawn, according to Thomson Reuters data.

The largest was the dropping by the Chinese insurer Anbang of a surprise $15 billion bid for Starwood Hotels in 2016.

The de facto veto is just the latest move by a Trump Administration that has shown it won't let United States companies in the strategic tech and financial industries be acquired by Chinese counterparts.

The Committee on Foreign Investment in the U.S. (CFIUS) blocked the proposals of the companies that tried to mitigate concerns related to the safety of personal data that could be used to identify citizens in the U.S., said sources close to the confidential talks.

A standard CFIUS review lasts up to 75 days, and the two companies had gone through the process three times to address the concerns.

The CFIUS is as an interagency group of regulators based out of the Treasury Department that reviews pending foreign purchases of US businesses for national security concerns.

But the deal faced intense scrutiny from a government panel that has become more active in blocking Chinese investments.

The United States has typically attracted relatively little Chinese dealmaking due to a mix of regulatory factors and the fierce competition that foreign buyers face from local players.

Xinhua said on Wednesday the U.S.

Acquiring MoneyGram would have expanded Ant Financial's market to around 350,000 locations in more than 200 countries. "Similar to USA government pension funds investing in American companies, a small number of Chinese government investment funds have minority stakes in Ant Financial", said a statement from a company representative. Ant also faced a rival bid from Euronet, prompting Ant to boost its offer by 36% to about $1.2 billion. Instead of equity, it opted to lend the group $841 million. This particular development isn't a huge surprise, since the deal was first announced about a year ago and its closure deadline was extended several times while the USA hemmed and hawed on its national security review.

The Chinese behemoth was forced to raise its initial offer for MoneyGram back in April after Euronet stepped into the fray. The charm offensive that Ma began soon after Donald Trump's election, and continued through 2017, clearly didn't help dispel the distrust of China that's taken hold in Washington-and looks set to deepen this year.



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