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MoneyGram And Ant Financial Terminate Merger

MoneyGram International Inc. (MGI) and Ant Financial Services Group said that they have mutually agreed to terminate their Amended Merger Agreement following the inability of the companies to obtain the required approval for the transaction from the Committee on Foreign Investment in the United States or "CFIUS", despite extensive efforts to address the Committee's concerns.

Following the announcement by MoneyGram and Ant Financial of the termination of their Merger Agreement, Euronet Worldwide, Inc. (EEFT)Separately said that it continues to believe there is compelling commercial logic to a combination between Euronet and MoneyGram. However, significant developments have been disclosed by MoneyGram since Euornet's offer and Euronet has not conducted any evaluation of the business in that time.

"While we continue to view a transaction with MoneyGram as logical, there is no guarantee any offer will be made or any transaction will ultimately occur," Euronet said.

Meanwhile, MoneyGram and Ant Financial also announced that they plan to work together on new strategic initiatives in the remittance and digital payments markets that will help each company achieve its objective of enabling consumers around the world to enjoy better money transfer services.

Alex Holmes, Chief Executive Officer of MoneyGram, said, "The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago. Despite our best efforts to work cooperatively with the U.S. government, it has now become clear that CFIUS will not approve this merger. We are disappointed in the termination of this compelling transaction, which would have created significant value for our stakeholders."

As per the new strategic business cooperation, MoneyGram and Ant Financial will explore and develop initiatives to bring together their capabilities in remittance and digital payments to provide their respective customers with user-friendly, rapid-response and low-cost money transfer services into China, India and the Philippines, among other Asian markets, as well as in the U.S. and other key regions around the world.

As previously announced on April 16, 2017, MoneyGram and Ant Financial entered into an amended merger agreement under which Ant Financial would acquire all of the outstanding shares of MoneyGram for $18.00 per share in cash. In accordance with the Merger Agreement, simultaneous with termination of the agreement, Ant Financial paid MoneyGram a $30 million termination fee.

MGI closed Tuesday's regular trading at $13.31, up $0.13 or 0.99%, But, in the after-hours trade, the stock dropped $0.91 or 6.84%.

by RTT Staff Writer

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