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Poor MoneyGram, Amazon Could Rescue

The U.S. government through the Committee on Foreign Investment in the United States (CFIUS) has blocked the plan by Ant Financial, owned by Alibaba's Founder (Jack Ma) and others, to acquire U.S. money transfer company MoneyGram. Ant Financial loses access into the U.S. and international financial ecosystems. But MoneyGram loses any immediate future. CFIUS concern was the security of data, of American citizens, in the hands of a Chinese firm.

The NASDAQ traded company has a market cap of about $670 million (post 10% loss today) but Ant Financial had agreed to pay $1.2 billion.

“Despite our best efforts to work cooperatively with the U.S. government, it has now become clear that CFIUS will not approve this merger,” MoneyGram Chief Executive Alex Holmes said in a statement on Tuesday.

This should be really bad news for MoneyGram because its money transfer business is imperiled in this age of blockchain. With the industry-leader Western Union struggling into the future, this company could be in trouble. It needs to find a buyer immediately because its usefulness has since gone.

I think PayPay could buy MoneyGram to deepen its offline business since that is becoming a norm. It is worth about $93 billion; $1 billion will not set it back that much. Or watch out, Amazon may like to buy it to make it easier for merchants to do business in its ecosystem globally.

The CFIUS's only headache is that of having US citizen's data in the hands of Chinese company? It makes sense then. MoneyGram owners shouldn't cry much, PayPal or Amazon should make a deal, and then everyone will go home happily.