China’s Ant Financial drops $1.2 billion MoneyGram deal as US approval fails

The $1.2 billion deal between MoneyGram and Ant Financial, announced a year ago, had been submitted to the the Committee on Foreign Investment several times, but failed to allay its concerns about the security of US customers’ data. (Reuters)
Updated 03 January 2018
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China’s Ant Financial drops $1.2 billion MoneyGram deal as US approval fails

BEIJING: Ant Financial, an affiliate of Chinese Internet titan Alibaba, has been forced to abandon a $1.2 billion (SR4.5 billion) deal to buy US remittances firm MoneyGram after failing to get approval from regulators in Washington.
The decision by the Committee on Foreign Investment (CFIUS) will deal a blow to Alibaba boss Jack Ma’s push into the world’s biggest financial market and follows a number of moves to prevent Chinese purchases of US firms.
The companies jointly announced the termination of the proposed takeover on Tuesday, with MoneyGram chief executive Alex Holmes saying: “The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago.
“Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger.”
The deal, announced a year ago, had been submitted to the CFIUS several times, but failed to allay its concerns about the security of US customers’ data.
Controlled by Ma, Ant Financial — which provides mobile payment, lending and credit services to a mostly Chinese clientèle — has looked to expand abroad along with Alibaba, China’s largest e-commerce platform.
Nasdaq-listed MoneyGram’s shares sank in after-hours trading.
The two companies will still look to cooperate in other ways despite the setback, Doug Feagin, president of Ant Financial International, said in a statement.
“While Ant Financial won’t have a direct ownership relationship with MoneyGram, we look forward to working closely with the MoneyGram team to make our platform even more accessible — particularly to unbanked and underserved communities globally.”
The news comes almost a year after Ma met then President-elect Donald Trump, promising to bring a million jobs to the US.
The personal relationship did not sway the Trump Administration, though, which has launched a number of anti-dumping trade cases against China and is in the process of investigating it over intellectual property issues.
The administration labeled China a “revisionist” power last month.
The CFIUS, which reviews all foreign takeovers of US firms with potential national security concerns, has squashed a number of Chinese purchases of US businesses in recent years, as concern grows in Washington about selling critical technology to China.
In September, Trump blocked the sale of Oregon-based Lattice Semiconductor to private equity firm Canyon Bridge, its Chinese partner Yitai Capital and Yitai’s parent the China Venture Capital Fund Corp. over national security concerns.
The CFIUS has also thwarted takeovers US chip makers Micron Technology and Sandisk by state-owned Tsinghua Unigroup.


FII2018: Company chiefs urged to embrace technological revolution

Top CEOs at the opening ceremony of the Future Investment Initiative conference in Riyadh. (AFP)
Updated 24 October 2018
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FII2018: Company chiefs urged to embrace technological revolution

  • If companies do not transform with clear strategies, they will be left behind, just like many companies that have failed

RIYADH: Company chief executives must embrace the technological revolution, delegates to the Future Investment Initiative conference were told.

Leaders need to come out of their traditional offices and engage with the community, said Yousef Al-Benyan, vice chairman and chief executive of Saudi Basic Industries Corp. (SABIC), the Saudi petrochemicals giant.

“I don’t look at it wholly from a regional point of view, but I look at it globally,” he said. “Transformation and the technology evolution are going to be very crucial. At the same time, it is going to create challenges for business.”

Companies should keep in mind that if they do not transform themselves with different platforms and clear strategies, they will be left behind, like many companies that had failed, Al-Benyan said.

“I’m not looking at incremental transformation but it has to be a complete transformation otherwise the companies will not be able to truly satisfy their shareholders.”

Al-Benayan also discussed the digital transformation that is changing the petrochemical industry, and how it will drive future growth.

The petrochemical industry is important for the growth of prosperity, Al-Benayan said. “The petrochemical industry is now everywhere in every individual’s life,” he said. 

SABIC is competitive, he said. “We have more than 21 centers globally, supported by more than 2,000 scientists and researchers to make sure that we have up-to- speed positions in our competitive environment.”  

Al-Benayan expressed concern about the future of job creation. The speed of technological innovation was greater than the speed of the transformation of Saudi Arabia’s education system, he said, which would create challenges for Saudi youth.