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US Blocks Sale Of Moneygram To China’s Ant Financial

The US has blocked the $1.2bn (£880m) sale of money transfer company, Moneygram. to China’s Ant Financial, the digital payments arm of Alibaba.

It is the highest profile Chinese deal to be rejected by Washington since Donald Trump came to power.

A news report by bbc.com quoted the company as saying that regulators overseeing foreign investments in the US refused to support the takeover.

The geopolitical environment had “changed considerably” since the merger was announced last year, they added.

Analysts believe that the collapse is a blow to the ambitions of Alibaba’s billionaire executive chairman, Jack Ma, who had promised President Trump that he would create a million US jobs.

Alibaba, which owns Ant Financial together with Alibaba executives, saw the US market as a way to expand overseas in the face of fierce domestic competition from the likes of Tencent’s WeChat.

In a joint statement on Tuesday, Ant Financial and Moneygram said they had abandoned the deal after failing to “obtain the required approval for the transaction from the Committee on Foreign Investment in the United States, despite extensive efforts to address the Committee’s concerns”.

Reports suggest the committee had cited security concerns over the takeover.

Commenting on the failed deal, Moneygram Chief Executive Officer, Alex Holmes said he was disappointed by the outcome and noted the “geopolitical environment has changed considerably” in the year since the deal was announced.

It would be recalled that the US had been toughening its stance on business dealings with China. For instance, the country launched a formal review of China’s intellectual property practices last October.

US politicians and military leaders have also urged the administration to take a closer look at Chinese investments in America, particularly in the technology industry.

Last September, the US blocked the $1 billion sale of US Lattice Semiconductor to Chinese-backed Canyon Bridge Capital Partners, citing concerns over the “potential transfer” of intellectual property from Lattice, which makes advanced computer chips.

Other deals that have been frustrated by US objections include, China Oceanwide Holdings Group’s $2.7bn purchase of US life insurer Genworth Financial, and Chinese buyout firm Orient Hontai Capital’s $1.4bn acquisition of US mobile marketing firm AppLovin.

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