— This is the script of CNBC's news report for China's CCTV on January 3, Wednesday.
Ant Financial clinched the all-cash deal of $18 per share to acquire MoneyGram in April. But now, Ant Financial has to pay MoneyGram a $30 million termination fee for the deal's collapse.
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 U.S. citizens, according to sources familiar with the confidential discussions.
The combination of these two payment giants was once seen as a win-win situation for both, as Ant Financial is best known for Alipay, a dominant online payments service, similar to PayPal, that had been part of Alibaba but separated after when Alibaba went public in 2014. Ant Financial itself is considered a top IPO candidate - thought in October 2017, the company reportedly decided to put its offering on hold as it expanded investments in start-ups.
MoneyGram, the second-largest money transfer company in the world, has a long history of dealing with multinational money transfers, dating back to the 1940s, and could have helped Ant Financial's prospects.
But according to Reuters, the protection of personal data raised concerns for U.S. regulators, which resulted in additional security measures and protocols that the companies suggested failing to reassure CFIUS.
After the news, MoneyGram shares overnight once traded at around $12 after hours Tuesday, down nearly 9 percent.
In fact, according to market research firm Forrester and iResearch, China's mobile payment market is almost 90 times the size of the United States, leading the world. But the MoneyGram deal is the latest in a string of Chinese acquisitions of U.S. companies that have failed to clear CFIUS.
And it's also the latest example of how CFIUS' focus on cyber security and the integrity of personal data is prompting it to block deals in sectors not traditionally associated with national security, such as financial services.
CNBC's Qian Chen, reporting from Singapore