(Corrects lead to say a top executive instead of its top
By Cate Cadell
BEIJING, March 17 Ant Financial Services Group,
the world's largest financial technology company, is confident
of closing the acquisition of U.S. money-transfer firm MoneyGram
International Inc but says it has other options if the
deal falls through, a top executive told Reuters.
The proposed $880 million deal is a first major step by Ant
Financial, the payment affiliate of Chinese e-commerce giant
Alibaba Group Holding, to expand its business overseas,
as the firm, valued at $60 billion, sets itself up for a public
"MoneyGram we view as very attractive because it gives a
global network of remittance capability and kind of an
omnichannel approach that connects us," Douglas Feagin, head of
Ant's international strategy, said in a phone interview.
"That’s why we’ve entered the transaction and look forward
to completing the deal with them."
But the plan faced a major hurdle this week as U.S.
electronic payments firm Euronet Worldwide Inc launched
a higher $1 billion bid for MoneyGram on Tuesday, arguing that
its all-American deal would face less regulatory scrutiny than a
lower bid by Ant.
Ant said earlier that it was making progress and on schedule
to obtain all required regulatory and shareholder approvals,
while MoneyGram has yet to decide whether it will recommend
Euronet's higher offer to its shareholders.
Feagin, who had worked at Goldman Sachs Group Inc for
more than two decades before joining Ant in 2016, declined to
say whether Ant would raise its offer for MoneyGram, and added
it was open to alternative tie-ups.
"There are a lot of digital payers that have come into the
remittance market that are offering interesting services and
capabilities, and a lot of those could be potentially
interesting partners for us as well," he said.
"We see a range of other alternatives to MoneyGram if that's
where we ended up."
MoneyGram, which was rescued through a $1.5 billion
financing deal in which Goldman participated after the subprime
mortgage crisis in 2008, has long dominated the global money
transfer industry with its large network of retail locations.
The Dallas-based firm has about 350,000 outlets in retail
shops, post offices and banks in nearly 200 countries and
A combination of Ant's technological expertise and
MoneyGram's brand could be a game-changer for the international
payment industry, analysts say, with scope for more consumers to
use online transfer services rather than taking cash to
MoneyGram's rivals include Euronet and Western Union Co
"The remittance business is one we see as quite helpful to
our international business and strategy, so we definitely want
to have that capability," Feagin said.
Ant, which dominates China's online payment market but has
been ramping up investment overseas amid fierce rivalry at home
with peers such as Tencent Holding Ltd's popular
WeChat Pay, is also eying several new deals around Southeast
Asia this year, Feagin said.
"We're focused on larger markets there in terms of the
population and the opportunity set. So I would expect to see
some other partnerships this year," Feagin said.
Ant Financial is currently in talks with Indonesian media
conglomerate Emtek to launch a payment joint venture, a source
with direct knowledge of the discussions told Reuters. Feagin
declined to comment on specific deals.
The push underlines Ant's ambitions to create a network of
financial assets around the region.
Ant has made a series of investments in foreign payment
firms in recent months as it looks to create an international
The spate of deals since the end of last year include
tie-ups with Ascend Money in Thailand, Kakao Pay in South Korea
and Mynt in the Philippines, following earlier investment in
Indian firm PayTM.
"(Southeast Asia) is quite attractive because it has the
fundamental characteristics of high mobile phone usage and
rising per capita income, but still has a large population that
is not banked," said Feagin.
According to analysts, the competition for payment and
remittance assets in the region has spiked as firms look for
deals to avoid the regulatory hurdles involved in entering the
"There's pressure in these markets because there's only a
limited number of quality assets," said Hong Kong-based EY
Fintech analyst Lames Lloyd.
"It wouldn't surprise me if other technology companies,
Chinese and otherwise, are equally engaged in these markets,
looking at what viable payments or remittance players they could
link to a global network," he said.
Ant Financial has confirmed plans for an IPO but it is not
expected until 2018 at the earliest. It raised $4.5 billion in a
record funding round in April, valuing the firm at around $60
billion, the same as American Express Co or insurer
Chubb Ltd and more than any other privately held fintech
Last month Reuters reported that Ant, whose hallmark payment
app Alipay boasts around 450 million users, was in early talks
to raise between $2 billion and $3 billion in debt to fund
acquisitions and foreign investments.
(Reporting by Cate Cadell; Editing by Will Waterman)