Chinese fintech giant Ant Financial is acquiring US money transfer service MoneyGram in an $880m deal.
Spun out of Chinese e-commerce giant Alibaba, Ant Financials’ core product is payments service Alipay.
The payments platform handles the majority of the e-commerce site’s transactions and is increasingly rolling out its mobile payments offering globally.
MoneyGram has a global network of more than 2.4 billion bank and mobile accounts across 350,000 locations globally making its one of the leaders in the traditional remittances space behind Western Union.
Ant Financials’ CEO Eric Jing said: “The acquisition of MoneyGram is a significant milestone in our mission to bring inclusive financial services to users around the world.
“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 will remain in its Dallas headquarters and continue to operate under its existing brand.
It will now gain access to Ant Financial’s network of more than 630 million users across AliPay in China and Indian mobile payments service Paytm, which Ant Financial invested $680m in for a 40% stake last year.
“One of MoneyGram’s greatest strengths is its high-quality team of employees,” said Jing.
“We are committed to continuing to invest in MoneyGram’s workforce and growing jobs in the United States, where MoneyGram has made a mark with outstanding customer service, innovative products and industry-leading technology and compliance programs.”
MoneyGram CEO Alex Holmes said: “MoneyGram can now accelerate and expand our suite of global hybrid solutions and integrate an even larger digital and physical network, making money transfers easier for customers and providing a wider selection of services for the agents who serve them around the world.
“Ant Financial is an ideal partner for MoneyGram; together, we will be able to expand our business and, in doing so, offer more people around the world access to a reliable financial connection to loved ones.”
The deal is still subject to approval by MoneyGram stockholders and regulators and is expected to close in the second half of 2017.
Citi advised Ant Financial on the deal and Bank of America Merrill Lynch acted as advisors to MoneyGram.
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