Jack Ma’s Ant Financial Buys MoneyGram for $880 Million
Ant Financial, the financial technology company controlled by billionaire Jack Ma, stepped up its international expansion by buying U.S. money-transfer service MoneyGram International Inc.
The $880 million transaction, Ant’s second U.S. deal, will connect MoneyGram’s network of 2.4 billion bank and mobile accounts with Ant’s customers. Ant, which was once part of Alibaba, is seeking to expand abroad amid increasing competition from Tencent Holdings Ltd.’s Wechat payment system at home. The MoneyGram deal will further that goal, following recent partnerships with Paytm in India and Ascend Money in Thailand.
“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 runs Ant Financial’s global operations, in a telephone interview. “Remittance is a very important activity and we think this is a great way for us to build a presence around U.S. consumers.”
Ant Financial is offering $13.25 per share in cash, according to a statement Thursday. That’s about an 11.5 percent premium to MoneyGram’s closing price of $11.88 Wednesday. The company will continue to be based in Dallas and operate under its existing brand. MoneyGram lets consumers and businesses send cash to one another, generating revenue from transaction fees and spreads on foreign-exchange rates. Last year, closely held Ant acquired EyeVerify Inc., a Kansas City, Missouri-based company that makes mobile eye-recognition software.
Shares of MoneyGram surged 8.8 percent in New York trading Thursday, the biggest gain since Oct. 28, to $12.92.
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