It’s quite frightening that the one money making company the chinese want to buy is the one that makes millions funneling money from illegal aliens to Mexico. Must be a good game to be in.
Chinese billionaire Jack Ma’s latest U.S. expansion plan is facing rising political obstacles.
On Friday, two members of the House of Representatives urged the Committee on Foreign Investment in the U.S. to conduct a “full and thorough” investigation of Ant Financial’s proposed acquisition of MoneyGram International Inc., a money-transfer service.
“The proposal merits careful evaluation as it would provide Chinese access to the U.S. financial infrastructure, a move that would pose significant national security risks if completed,” Congressman Kevin Yoder and Congresswoman Eddie Bernice Johnson wrote in a letter to Treasury Secretary Steven Mnuchin.
Formerly a financial-services affiliate of Alibaba Group Holding Ltd. and controlled by Ma, Ant made its bid in January for $880 million, or $13.25 a share. In March, Leawood, Kansas-based rival Euronet Worldwide Inc. came in at $15.20, saying its offer had a better chance at regulatory approval. Dallas-based MoneyGram entered a confidentiality agreement with Euronet in late March to further consider its unsolicited proposal.
Chinese companies have been on an acquisition spree in the U.S. for many years, but the trend has slowed recently in the face of mounting political opposition and national security concerns. In December, German semiconductor maker Aixtron SE’s planned sale to a Chinese-based company fell through after then-President Barack Obama upheld a CFIUS recommendation that the sale should be stopped. Aixtron has a subsidiary in California and it generates about 20 percent of sales in the U.S.
President Donald Trump has taken a hard stance on China since taking office, increasing the chance Ant Financial’s bid will be closely scrutinized by CFIUS, an inter-agency panel that examines acquisitions of companies by foreign investors. The White House can stop the deal, and Mnuchin is the chairman of the panel. Research firm Beacon Policy Advisors expects the new administration to block “a wide range” of deals as part of Trump’s America First agenda.
“The real threat is that the Trump administration sees political upside to stopping the deal to show it is tough on China,” wrote Jaret Seiberg, an analyst at Cowen & Co., in a note to investors. “Trump has talked very tough on China, which makes it easier to pressure him to get tough on a Chinese company buying a domestic company.”
MoneyGram shares fell 0.50 percent to $16.81 at the close in New York. They have more than doubled in the past year.