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Ant Financial, MoneyGram Deal Worth $880M

Image: Ant Financial, MoneyGram Deal Worth $880M

A netizen browses the website of Ant Financial of Chinese e-commerce giant Alibaba Group. (Imaginechina via AP Images)

By    |   Thursday, 26 Jan 2017 03:27 PM

Ant Financial Services Group, a leader in China's online payment industry, plans to buy U.S.-based MoneyGram International Inc. for about $880 million.

"The combination will provide consumers in over 200 countries and territories with convenient and accessible financial services, which furthers Ant Financial’s mission to promote equal access to financial services globally," Ant Financial, which is an affiliate of Chinese e-commerce firm Alibaba Group Holding Ltd., said in a news release.

MoneyGram will maintain its Dallas headquarters and brand, according to the release.

“Since the 2009 (recapitalization) MoneyGram has had a challenging journey and has finally found a home,” Mike Grondahl, a Northland Capital Makers analyst, said, according to Reuters.

MoneyGram has about 350,000 outlets in nearly 200 countries, Reuters noted.

“This gives us a very attractive business that’s already quite engaged with a substantial consumer base in the U.S.,” said Douglas Feagin, who’s in charge of Ant Financial’s global operations, according to Bloomberg. “Remittance is a very important activity and we think this is a great way for us to build a presence around U.S. consumers.”

MoneyGram ran into financial woes in 2008 after making risky investments, but recovered thanks to a debt deal with Goldman Sachs Group Inc. and Thomas H. Lee Partners LP, a private equity firm, Reuters noted. Ant Financial said it will “assume or refinance” the company’s $940 million in debt.

The $880 million deal is expected to be finalized later this year.

According to Bloomberg, MoneyGram's business could suffer from President Trump’s potential policy changes regarding immigration and trade. Many immigrants used MoneyGram to transfer payments to and from the U.S. under the Obama administration, but that could all change soon, as Trump wants to “cut off the remittances” that immigrants in the states have been able to send to their families in their home countries for years.

Trump issued a memo last year that echoed these plans, according to The Washington Post.

At the time, Trump wrote that starting “day 1,” he would issue a new federal provision, taking all funds sent to Mexico from undocumented immigrants living and working in the U.S.

Trump also wrote that “if the Mexican government will contribute $_ billion to the United States to pay for the wall, the Trump Administration will not promulgate the final rule, and the regulation will not go into effect.”

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Ant Financial Services Group, a leader in China's online payment industry, plans to buy U.S.-based MoneyGram International Inc. for about $880 million.
ant financial, moneygram, deal, china
392
2017-27-26
Thursday, 26 Jan 2017 03:27 PM
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