MoneyGram is calling off its merger with a Chinese financial services giant after failing to get approval from the U.S. government.
The deal between Ant Financial, an affiliate of Jack Ma's conglomerate Alibaba (BABA), and the American money transfer service was first announced in January 2017. Ant Financial originally agreed to pay $880 million, but upped its offer to $1.2 billion in April after a U.S. company made an unsolicited bid on MoneyGram.
The agreement had been under review by the Committee on Foreign Investment in the United States, the inter-agency body that vets deals that could give a foreign investor control of a U.S. business.
"Despite our best efforts to work cooperatively with the U.S. government, it has now become clear that CFIUS will not approve this merger," Holmes said.
The Treasury Department, which chairs CFIUS, said the agency is "prohibited by statute from publicly disclosing information filed with CFIUS."
The acquisition would have been Ant Financial's first major move to expand its footprint overseas. MoneyGram, which has over 650 million users worldwide, competes with Western Union for cross-border money transfers to countries like Mexico.
Ant Financial paid MoneyGram a $30 million fee to terminate the deal.