Ant Financial has stepped up its international expansion by reportedly buying US money-transfer service MoneyGram International for $880 million.
The $880 million acquisition marks Ant’s first deal with a US-listed company, as it begins to explore markets beyond a home arena it already dominates. The transaction will connect MoneyGram’s network of 2.4 billion bank and mobile accounts with Ant Financial’s customers, who use a broad suite of technology-based financial services including payments, credit and insurance.
“This gives us a very attractive businesses that’s already quite engaged with a substantial consumer base in the US,” said Douglas Feagin, who runs Ant Financial’s global operations, in an interview with Bloomberg. “Remittance is a very important activity and we think this is a great way for us to build a presence around US consumers.”
The deal “seems rational,” as Alibaba could help MoneyGram obtain a more robust presence in big global corridors, said Andrew Jeffrey, an analyst at SunTrust Robinson Humphrey.
Ant Financial, whose Alipay handles the majority of transactions on Alibaba Group Holding Ltd.’s online shopping sites, last year appointed a new chief executive officer to steer its next phase of growth and possibly oversee a public market debut in 2017.