Ant Financial Defends MoneyGram Acquisition By Going Offensive On Rival Euronet

Ant Financial Services Group issued a long statement today defending its US$880 million deal to acquire U.S. money transfer company MoneyGram International Inc., after American payment firm Euronet Worldwide Inc. made a higher offer last month.

"In the four weeks since launching a hostile bid to break up Ant Financial’s agreed-upon merger with MoneyGram, Euronet has conducted broad-based political attacks in Washington against Ant Financial Services Group and the integrity of MoneyGram’s business and data security practices in an attempt to stop a compelling transaction involving a core competitor," Doug Feagin, president of Ant Financial International, said in a statement.

It appears that the Chinese Internet financial services giant does not plan to increase its price, and is trying everything it can to complete the transaction without having to spend more. NASDAQ-listed Euronet made a proposal a month ago to acquire MoneyGram for US$15.20 apiece in cash, valuing the company at more than US$1 billion. Ant Financial and MoneyGram agreed to a deal in January at a price of US$13.25 apiece.

Ant Financial went offensive by saying that Euronet’s hostile bid for MoneyGram does nothing to advance American interests, because Euronet’s operations are primarily in Eastern Europe where the company was founded and is still heavily concentrated. Over 85% of Euronet’s assets are outside of the U.S.

Ant Financial also pointed out that Euronet has just 150 employees in its U.S. headquarters, according to the Kansas City Business Journal. Nearly all of Euronet’s servers and data centers where its customer information resides are located outside of the U.S., with two only data facilities in the U.S.

Euronet was recently fined millions of dollars by regulators for a massive data breach that exposed more than two million credit card accounts. It derives only 28% of its revenue in the U.S. and pays virtually no tax in the U.S., according to its annual report to shareholders. The Dallas, Texas-based Euronet has told investors it plans to cut US$60 million in costs if it acquires MoneyGram, which would inevitably impact U.S. facilities and employment, leading to significant U.S. job cuts, Ant Financial added.

On the contrary, MoneyGram will continue to independently operate all its data systems if it was acquired by Ant Financial, which will not have access to any U.S. customer data.

Additionally, the entire Texas-based MoneyGram management team and all of its employees in the U.S., including the data security team, will remain in place at MoneyGram, Ant Financial said.

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Nina Xiang is the co-founder and managing editor overseeing editorial content and product development at CMN. Before founding CMN in 2011, Nina worked at BusinessWeek magazine in Beijing and Institutional Investor magazine in New York, writing about business and financial services. While in New York, she also served as part-time correspondent for Shanghai's financial television channel, China Business Network, as well as China Radio International, China's national English-language radio network.