The $1.2bn (£880m) sale of money transfer brand Moneygram to Chinese company Ant Financial has been blocked by US regulators, according to BBC News.
The merger was announced in 2017 but authorities declared that the geopolitical environment had “changed considerably” since. Reports have indicated that regulators had security concerns about the takeover.
A joint statement from Moneygram and Ant Financial, the digital payments arm of Alibaba, confirmed that the deal would be abandoned “following the inability of the companies to obtain the required approval for the transaction from the Committee on Foreign Investment in the United States, despite extensive efforts to address the Committee’s concerns.”
Alibaba’s executive chairman Jack Ma is said to be disappointed that the deal has fallen through. Ma promised US President Donald Trump that he would create one million US jobs. Alibaba is said to have seen the purchase of Moneygram as a way to use overseas expansion to offset against domestic competition.
The blocked deal emphasises a trend towards the US being tougher in its position on business with China. Last year the US launched a formal review of China’s intellectual property practices. Politicians and military leaders have also been calling for an investigation into Chinese investments in the US, particularly in the field of technology.
Other recent Chinese-American deals that have been blocked include the $1.3bn sale of Lattice Semiconductor to Chinese-backed Canyon Bridge Capital Partners, the $2.7bn purchase of Genworth Financial by China Oceanwide Holdings Group and the $1.4bn acquisition of AppLovin by Orient Hontai Capital.