Ant Financial, the digital payments arm of Chinese ecommerce group Alibaba, has scrapped a merger with Dallas-based MoneyGram International, having failed to satisfy the US government that the deal posed no risk to America’s national security.
Ant announced a deal to buy MoneyGram for about $880m in cash almost a year ago, saying it would jump-start its global growth strategy. The Huangzhou-based company then saw off a competing bid from Euronet, a money-transfer rival based in Kansas, by improving its offer to $1.2bn.
But on Tuesday Ant and MoneyGram said that they had failed to obtain clearance for the deal from the Committee on Foreign Investment in the United States, an arm of the Treasury Department which vets inbound acquisitions for security implications.