Ant Financial, e-commerce giant Alibaba’s financial arm, announced on Monday that it has raised the value of its bid to acquire U.S. money-transfer company MoneyGram to $1.2 billion, up 36 percent of its original $880 million offer, as well as making it more lucrative than what was offered by Euronet.
The company which owns Alipay, one of China’s biggest online payment platforms, was forced to sweeten its bid after U.S.-based Euronet Worldwide Inc jumped in the game last month with an unsolicited $1 billion offer. The Ant’s new offer easily beats Euronet’s bid, which proposed $15.20 per share, and also represents a 9 percent premium to MoneyGram’s last traded share price on Thursday, noted Reuters.
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MoneyGram said in a joint statement on Sunday that its board unanimously approved the new deal. However, the planned takeover is expected to face more regulatory scrutiny than the lower bid made by Euronet for its Dallas-based rival. A Euronet deal would face fewer hurdles than a bid from a Chinese company and also doesn’t not require clearance by the Committee on Foreign Investment in the United States (CFIUS), a U.S. agency that reviews foreign acquisitions of domestic assets for national security concerns.
According to media reports, Euronet openly lobbied U.S lawmakers, saying Ant’s proposal created a national security risk although MoneyGram will remain headquartered in Dallas and continue to operate under its existing brand. Several congressmen criticized the deal with the affiliate of Alibaba saying that the Chinese government has nearly 15 percent stake in Ant.
“Should this transaction be approved, the Chinese government would gain significant access to, and information on, financial markets and specific international consumer money flows,” said U.S. congressmen Robert Pittenger and Chris Smith.
According to Ant Financial, the transaction will connect its vast network of users with MoneyGram’s money transfer network of 2.4 billion bank and mobile accounts and 350,000 physical locations. In turn, MoneyGram will tap Ant Financial’s global presence and existing network to cater to over 630 million users and increase its business in Asia.