The geopolitical environment has changed considerably since…a year ago.” That was the explanation given this week by Alex Holmes, chief executive of MoneyGram International, a Dallas-based American money-transfer firm, for Ant Financial abandoning its $1.2bn deal to buy his firm. Ant, the online-payments affiliate of Alibaba Group, a Chinese e-commerce giant, had outbid Euronet, an American rival, in 2017 and secured the approval of MoneyGram’s board for the acquisition. In normal times, Ant would have secured the prize.
But it is up against a rising tide of anti-China sentiment in Washington, DC. Donald Trump has often argued that China does not play fair in global commerce. The sense that China and its companies are not to be trusted is spreading on Capitol Hill, too. Ant’s bid was blocked by the Committee on Foreign Investment in the United States (CFIUS), a government body reporting to the Treasury. It reviews such deals for national-security implications. Two congressmen claimed that approving Ant’s purchase of MoneyGram might allow “malicious actors” to get hold of financial data belonging to American soldiers and their families.
Alibaba seemed the least likely of Chinese firms to encounter a backlash in America. Alipay, Ant’s online-payment offering, has already entered into partnerships with Verifone and First Data, two American payments firms, and is accepted at some 175,000 locations in the country. In January 2017 Jack Ma, its charismatic boss, met with then President-elect Trump and promised to create a million American jobs through cross-border e-commerce. News of the deal for MoneyGram came shortly afterwards.