Alibaba founder Jack Ma’s plan to acquire money transfer company MoneyGram has collapsed after a US government panel rejected it over national security concerns, the most high-profile Chinese deal to be torpedoed by Donald Trump’s administration.



The $1.2bn (£885m) deal’s failure represents a blow forMa, the executive chairman of the Chinese internet conglomerate.

MoneyGram International was to have been bought by Ant Financial, a financial services and payment processing company Ma owns together with Alibaba executives.

He was looking to expand Ant Financial’s footprint amid fierce domestic competition from Chinese rival Tencent’s WeChat payment platform.



Ma, a Chinese citizen who appears frequently with leaders from the highest echelons of the Communist party, had promised the US president in a meeting a year ago that he would create 1m US jobs.

MoneyGram shares fell 8.5% in early trading on Wall Street on Wednesday.

The companies decided to terminate their deal after the committee on foreign investment in the United States (CFIUS) rejected their proposals to mitigate concerns over the safety of data that can be used to identify US citizens, according to sources familiar with the confidential discussions.

“Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger,” the Moneygram chief executive, Alex Holmes, said in a statement late on Tuesday.

Jack Ma with Donald Trump in January 2017. The Alibaba founder promised he would create 1m US jobs. Photograph: Timothy A. Clary/AFP/Getty Images

The US government has toughened its stance on the sale of companies to Chinese entities, at a time when Trump is trying to put pressure on China to help tackle North Korea’s nuclear ambitions and be more accommodating on trade and foreign exchange issues.

The MoneyGram deal is the latest in a string of Chinese acquisitions of US companies that have failed to clear CFIUS, including the $1.3bn purchase by China-backed buyout fund Canyon Bridge Capital Partners of US chip maker Lattice Semiconductor.

In November, China Oceanwide Holdings Group and Genworth Financial extended a deadline to 1 April for the Chinese group’s planned $2.7bn takeover of the US life insurer.

Asked on Wednesday for Beijing’s view on the deal’s rejection, a Chinese foreign ministry spokesman said cooperation on economic and trade matters was of mutual benefit.

*We hope the US can create a fair and predictable environment for Chinese enterprises to invest and start up businesses,” the spokesman said.

However, commentary published after the deal’s collapse by official news agency Xinhua went further, describing a fading bonhomie between the two countries, with the US “stuck in a zero-sum mentality”.

“China and the United States are about to ride a bumpy journey in trade in 2018 if the US government goes its own way, and retaliatory measures by China could be on the table,” it said.