A logo of Ant Financial is displayed at an event of the company in Hong Kong.
Beijing: Ant Financial Services Group, the world’s largest financial technology company, is confident of closing a deal for US money-transfer firm MoneyGram International Inc, a top executive told Reuters, despite a higher bid from a US rival.
The proposed $880m deal is a first major step by Ant, the payment affiliate of Chinese e-commerce giant Alibaba Group Holding, to expand its business overseas, as the firm, valued at $60bn, sets itself up for a public offering.
“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 US electronic payments firm Euronet Worldwide Inc launched a higher $1bn 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, but said the deal was important for the firm’s global push.
MoneyGram, which was rescued through a $1.5bn 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 shops, post offices and banks in nearly 200 countries and territories. Its rivals include Euronet and Western Union Co.
A combination of Ant’s technological expertise and MoneyGram’s brand could be a game-changer for the global payment industry, analysts say, with scope for more consumers to use online transfer services rather than taking cash to storefronts.
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.
Ant Financial is currently in talks with Indonesian media conglomerate Emtek to launch a payment joint venture.
The push underlines Ant’s ambitions to create a network of financial assets around the region. 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.
Ant Financial has confirmed plans for an IPO but it is not expected until 2018 at the earliest. It raised $4.5bn in a record funding round in April, valuing the firm at around $60bn, the same as American Express Co or insurer Chubb Ltd and more than any other privately held fintech firm.
