(Adds statement from Euronet)
BEIJING, April 6 China's Ant Financial tried to
soothe security concerns about its proposed $880 million
takeover MoneyGram International Inc on Thursday, saying
it intends to store U.S. user data locally once the deal closes.
The finance affiliate of Alibaba Group Holding Ltd
will meet MoneyGram's existing security infrastructure standards
and invest in U.S. jobs, Ant's head of international strategy
Douglas Feagin said.
"Any data collected on MoneyGram users in the U.S. will
continue to reside on the same ironclad U.S.-based servers that
meet the high security standards your customers trust today,"
Feagin said in an open letter.
Feagin added that Ant plans to invest in global compliance
measures and anti-money laundering programs.
Ant agreed to buy MoneyGram in January, but last month
Kansas-based Euronet Worldwide Inc made a rival offer
and called on the U.S. government to scrutinise Ant's bid over
"significant national security risks."
Euronet chief Michael Brown said Chinese ownership could
compromise the relationship between law enforcement and
MoneyGram when investigating money laundering and "terrorist
Euronet said in a statement on Thursday that "the location
of servers is completely irrelevant to the security of data,"
since the architecture of the servers will be controlled by the
ultimate owner of MoneyGram.
MoneyGram could not immediately be reached for comment.
Ant's bid comes amid heightened tension between China and
the United States over trade. It will be subject to a review by
the Committee on Foreign Investment (CFIUS), a U.S. inter-agency
panel that reviews foreign acquisitions for national security
risks which has scuttled recent Chinese deals.
Dallas-based MoneyGram is one of the biggest firms in the
global remittance market, offering services in around 350,000
stores across 200 countries. It would provide Ant with a coveted
network of financial partnerships and form a lynchpin in their
Over the past six months Ant has acquired strategic
interests in payment firms in Thailand, South Korea and the
Philippines, adding to existing investments in India. It plans
to announce at least two further deals in Asia this year.
Euronet's initial proposal is valued at about $1 billion and
MoneyGram has said it will carefully consider the offer.
(Reporting by Cate Cadell; additional reporting by Liana;
Editing by Alexander Smith and Tom Brown)