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Earlier this week, Ant Financial, Alibaba’s digital payments arm announced that it will be acquiring MoneyGram, the American money transfer services.
MoneyGram International Inc. is based in Dallas, Texas. It is a money transfer company. Founded in 1940, it is the second largest company of its type in the world. MoneyGram divided its operations into two categories. One is the Financial Paper Products. The other is the Global Funds Transfer.
The company collaborates with both businesses and individuals. Relations are maintained through an agent network. And also through financial institution customers.
MoneyGram operates in over 200 countries. Its global network of services includes around 347,000 agent offices. On January 26, Ant Financial released an official statement.
This was posted on the company blog. And it announced that the company will be acquiring MoneyGram. The sales deal will have a $880 million value.
Ant Financial Services Group is an Alibaba Group affiliate. It is in charge of the latter’s AliPay payment platform. It also operates the Sesame Credit rating system. The Alibaba Group Holding Limited is based in China. It is an e-commerce company, one of the largest in the world.
Ant Financial is in charge of its digital payments. The service has more than 630 million users. Company officials also released a series of statements. One of them belongs toEric Jing. He is the Ant Financial Chief Executive.
According to Jing, the union of the two companies could bring significant advantages. It would bring benefits to people from all over the world. Their financial transactions could be simpler and more secure. A union would also provide a greater customer access. Remitting money would become a simpler process. Especially for people living in major economy countries.
Presently, Ant Financial has quite an important market share in the online payments industry. Especially so in its native China. By acquiring MoneyGram, the company could greatly expand its outreach. Its services would become available at a global level.
The MoneyGram acquisition price has been set at $880 million. MoneyGram’s Board of Directors has reportedly approved the takeover. But the sale deal will also have to receive a regulatory approval.
This is decided by the United States Committee on Foreign Investment. This reviews potential foreign acquisitions of domestic assets. The inter-agency carried out such investigations on grounds of the national security. It remains to be seen if the MoneyGram takeover will be directly approved.
MoneyGram shares rose after the release of the announcement. Their per share value increased by almost 9 percent. The transaction’s value would account for a $13.25 per share value.
If approved, the deal is expected to close sometime in the second half of 2017.
The merger of the two companies will be quite beneficial for them both. Even after the takeover, MoneyGram will operate independently. It will be keeping its brand name.
However, the U.S. fintech company will connect its network. It will unite it with the Chinese company’s own system. As such Ant Financial will have access to its 2.4 billion accounts. And also to its 350,000 physical locations. This money transfer network includes both mobile and bank accounts.
MoneyGram, for its part, will also gain access to Ant Financial’s system. Its 630 million users system can help the fintech expand its global presence.
The companies will be collaborating for the integration of their platforms. Alex Holmes, the MoneyGram CEO also released a statement. He declared that the merger will significantly benefit all the consumers from around the globe.
Image Source: Flickr