(27 January 2016 – China) China's Ant Financial is flexing its international muscle by agreeing to buy US money transfer service MoneyGram in a cash deal worth US$880 million (A$1.16 billion).
The deal will see MoneyGram stockholders offered US$13.25 a share in cash, 17.5 percent premium on its latest closing price of US$11.88.
The merger follows the Chinese firm’s CEO, Eric Jing’s statement last week to utilise available capital to increase the firm’s user base to two billion people over the next 10 years.
According to the Alibaba unit, the venture will connect its hundreds of millions of users with MoneyGram’s money transfer network of 2.4 billion bank and mobile accounts and 350,000 physical locations.
“The acquisition of MoneyGram is a significant milestone in our mission to bring inclusive financial services to users around the world. We believe financial services should be simple, low-cost and accessible to the many, not the few,” said Jing.
“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.”
MoneyGram said it will use Ant Financial’s global presence and existing network to serve more than 630 million users – including 450 million with mobile wallet Alipay and 180 million with Indian m-payment provider Paytm – to increase its business in Asia.
The US firm will remain headquartered in Dallas and continue to operate under its existing brand, led by CEO Alex Holmes.