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Wall Street Journal / Life - Entertain

Ant-Moneygram’s Demise Spells the End for China-U.S. Deal Making

CFIUS’s decision to block the proposed $1.2 billion deal shows that Beijing’s recent efforts to relax foreign investment rules aren’t going to meet with much reciprocity.


Anjani Trivedi

When even Jack Ma can’t get a deal done, it’s time to call an end to meaningful Chinese acquisitions in the U.S. Just a year ago, President-elect Donald Trump boasted that he and Mr. Ma—China’s best-known businessman and the founder of tech giant Alibaba —would “do great things” together, amid talk of creating one million American jobs.

Not so much. Even Mr. Ma’s assiduous efforts to play to the current nationalistic tone in Washington haven’t been enough to ensure the approval of Alibaba-affiliate Ant Financial’s planned $1.2 billion acquisition of U.S. based money transfer company MoneyGram International Inc. The deal was blocked Tuesday by the Committee on Foreign Investment in the U.S. (CFIUS), a multiagency government panel that normally scrutinizes deals for potential impacts on national security.

Alibaba’s Jack Ma in Argentina in December. Photo: Associated Press

An Ant-Moneygram tie-up raised some concerns about the protection of U.S. customers’ data, mostly stoked by rabble-rousing from Kansas-based Euronet Worldwide, a rival bidder for MoneyGram. And it’s true that China isn’t the most open country to foreign ownership.

Even so, Beijing has softened its attitude somewhat recently, relaxing its foreign-investment policies to lure more capital into specific sectors, including financial services. With the CFIUS decision on Ant and MoneyGram, it’s clear such moves aren’t going to be met with much reciprocity.

For investors, the takeaway is that the “China bid” that has helped boost global asset prices this century may be gone for good, at least in developed markets. Beijing has been cracking down on asset-buying abroad by busy acquirers like Anbang Insurance and HNA Group. Money from China could still find a home in favored sectors like high-end manufacturing. But with Washington now officially joining in the protectionism party, the future for deal making looks bleak indeed.

Write to Anjani Trivedi at anjani.trivedi@wsj.com