A United States government panel has rejected Ant Financial’s proposed takeover of MoneyGram on national security grounds, the companies announced on Tuesday, as the US continues to tighten oversight of Chinese investment, Reuters reports.
The collapse of the $1.2 billion deal is a blow for Jack Ma, the executive chairman of Chinese internet conglomerate Alibaba Group, which owns Ant Financial. Ma promised US President Donald Trump in January 2017 that he would create 1 million American jobs.
MoneyGram shares fell to $12.06, a drop of 8.5%, in after-market trading following the announcement.
The companies decided to abandon the deal after they were unable to allay the concerns of the Committee on Foreign Investment in the United States (CFIUS) over the safety of data that could be used to identify US citizens, according to sources familiar with the confidential discussions.
Ant Financial is just the latest Chinese company to face barriers to buying out US businesses in recent months. CFIUS has also blocked China-backed buyout fund Canyon Bridge Capital Partners LLC’s $1.3 billion acquisition of US chip maker Lattice Semiconductor Corp, China Oceanwide Holdings Group Co Ltd’s $2.7 billion acquisition of US life insurer Genworth Financial Inc, and Chinese buyout firm Orient Hontai Capital’s $1.4 billion acquisition of US mobile marketing firm AppLovin.