Merger Agreement - Ant Financial, the finance company spun out of Chinese e-commerce giant Alibaba, has agreed a deal to buy MoneyGram for $880 million
Acquiree: MoneyGram International Inc is a money transfer and payment services company. Its products include money transfers, bill payment services, money order services and official check processing
Acquirer: Ant Financial Services Group, the payment affiliate of Chinese e-commerce firm Alibaba Group Holding Ltd (BABA.N). Ant Financial's Alipay payment platform dominates the online payments industry in China and is looking to expand its presence overseas.
- Price: Ant Financial Services Group said it would buy U.S. money-transfer company MoneyGram International Inc (MGI.O) in a deal valued at about $880 million. MoneyGram, which started as a small money-order company in Minneapolis in 1940, is now second only to Western Union Co (WU.N) among money-transfer providers. It has about 350,000 outlets in retailers, post offices and banks in nearly 200 countries and territories.
- Acquisition cost: cash offer (US$13.25 a share), Ant Financial said it would assume or refinance MoneyGram's outstanding debt, which stood at $937.3 million on a net basis as of Sept. 30, according to a regulatory filing. The transaction is valued at approximately $880 million for all of MoneyGram's common and preferred shares on a fully diluted basis and Ant Financial will assume or refinance MoneyGram's outstanding debt.
- Deadline of merger (Q2 2017): The companies said the acquisition was expected to close in the second half of 2017. The transaction will connect MoneyGram's money transfer network of 2.4 billion bank and mobile accounts and 350,000 physical locations with Ant Financial's users, who enjoy a broad suite of technology-based financial services, including payments, credit and insurance products.
- Breakup contingencies (not disclosed): The transaction is subject to the approval of MoneyGram stockholders, regulatory approvals and other customary closing conditions. MoneyGram's biggest shareholder, Thomas H. Lee Partners, which has a 44.5 percent stake, agreed to vote in favor of the deal, the companies said.
- Government antitrust possibilities: The parties expect the transaction to close during the second half of 2017. MoneyGram will remain headquartered in Dallas, Texas, and continue to operate under its existing brand. The combination of Ant Financial and MoneyGram will provide greater access, security and simplicity for people around the world to remit funds, especially in major economies such as the United States, China, India, Mexico and the Philippines. The companies said the deal would be subject to approval by the Committee on Foreign Investment in the United States (CIFIUS), a U.S. inter-agency panel that reviews foreign acquisitions of domestic assets for national security concerns. CIFIUS has been a stumbling block for several Chinese deals in the Unites States