Ant Financial Carries Off MoneyGram
We’re right around a month into the new year and there’s already one big burst of merger and acquisition news afoot; Chinese financial titan Ant Financial Services has made an agreement to buy MoneyGram, a money transfer firm in the United States.
Ant Financial is planning to drop $880 million on this venture, a move that gives the Chinese firm a new foothold in the United States markets.
The $880 million purchase price actually represents a substantial premium over recent closing prices; Ant Financial is set to pay $13.25 a share, which was 12 percent over the price at closing back on Wednesday.
Given that Ant has a valuation of $60 billion, and recently raised a hefty $4.5 billion in funding, the $880 million dropped on MoneyGram is comparatively light. Ant has previously been seen making other inroads into the United States, having previously purchased EyeVerify, which specializes in eye recognition for mobile devices, making it an excellent fit for mobile biometric operations.
In turn, Ant Financial receives an operation with around 350,000 locations to its credit, contained within about 200 nations. That’s going to give Ant Financial not just a foothold in the United States but around the world as well.
The ultimate question here, of course, is why. Why is Ant Financial dropping staggering amounts of cash on one firm? Well, its scope certainly doesn’t hurt; with one firm’s purchase, Ant Financial has increased its global range substantially.
Throw in the fact that money is increasingly going digital—as we’ve seen throughout the mobile payments ecosystem for years now—and the end result is that having a firm like MoneyGram involved can help Ant Financial make a push in that same direction.
Plus, Ant Financial may have gotten a bargain; MoneyGram was already considering a sale back in 2013, so four years later, it may have been even more motivated to sell.
There are many potential explanations here, and it’s clear that Ant Financial is now an even more dominant figure in a still young yet growing market. This could be a good move for the company, and one that gives it a lot more power in the field.