US shoots down MoneyGram’s sale to China’s Ant Financial

A US government panel rejected Ant Financial’s acquisition of MoneyGram International Inc over national security concerns, the companies said on Tuesday, the latest Chinese deal torpedoed under the administration of US President Donald Trump.

The US$1.2 billion deal’s collapse represents a blow for Jack Ma, the executive chairman of Chinese internet conglomerate Alibaba Group Holding Ltd, who owns Ant Financial together with Alibaba executives. Ma promised Trump in January 2017 that he would create 1 million US jobs.

MoneyGram shares were down 8.5 per cent at US$12.06 in after-market trading.

The companies decided to terminate their deal after the Committee on Foreign Investment in the United States (CFIUS) rejected their proposals to mitigate concerns over the safety of data that can be used to identify US citizens, according to sources familiar with the confidential discussions.

A standard CFIUS review lasts 75 days, and the companies had gone through the process three times to address its concerns. Additional security measures and protocols that the companies suggested failed to reassure CFIUS, the sources said.

The US government has toughened its stance on the sale of companies to Chinese entities, at a time when Trump is trying to put pressure on China to help tackle North Korea’s nuclear ambitions and be more accommodative on trade and foreign exchange issues.