The world of sport, particularly cricket, is closely watching the unfolding acquisition of US payment transfer company MoneyGram.
Chinese giant Ant Financial, owned by Jack Ma of Alibaba Group, has announced that it will acquire US-based MoneyGram for $880 million. The transaction has been approved by MoneyGram’s board. MoneyGram’s biggest shareholder, Thomas H. Lee Partners, which owns 44.5 per cent equity, has also decided to back the deal.
“The acquisition of MoneyGram is a significant milestone in our mission to bring inclusive financial services to users around the world,” Ant Financial Chief Executive Eric Jing said in a statement.
MoneyGram is one of the key partners of the International Cricket Council (ICC). It signed up for an eight-year deal with ICC after the first stint of five years ending in 2015.
“Our association with the ICC has certainly helped establish MoneyGram as a preferred brand for South Asians around the world,” MoneyGram CMO Juan Agualimpia had said after the eight-year deal.
Earlier this month, Alibaba Group had announced the biggest ever sponsorship deal with the International Olympic Committee (IOC). The deal, believed to be worth $800 million, will help Alibaba become a digital partner of IOC. It will position Alibaba as the top tier sponsor for the world’s biggest sporting event and will run till 2028.
Business of cricket
The acquisition of MoneyGram could further the cause of Alibaba Group in the world of sport. The IOC deal drives engagement in China while MoneyGram, through cricket, has been keen on expanding its presence in India.
Alibaba is also an investor in Paytm, which is the lead sponsor for the Indian cricket team. It has a four-year deal with the Board of Control for Cricket in India (BCCI) to be the sponsor of Indian cricket’s domestic and international matches. Paytm, an e-commerce and financial services focused company, will launch India’s second payments bank shortly.
Cricket enjoys cult-like following in India and Paytm plans to ride on cricket to expand its financial services offering.
When it decided to take the plunge, MoneyGram’s association with ICC had two key reasons. First, expatriates from South Asia with strong liking for cricket in countries like Australia, UK. And importantly, those living in countries like US, Europe where they play cricket at an amateur level.
In the US and other countries, MoneyGram cricket clubs have helped the brand associate with cricket as well as South Asian community. MoneyGram supports cricket in countries even where a small community plays the game.
Ant Service is a giant in its home country China, serving nearly 450 million customers, offering a variety of financial services products. In its domestic market, it is facing strong competition from rival payment platforms, WeChat and TenCent Holdings.
MoneyGram is the second largest payment-transfer service in the US after Western Union. It has nearly 350,000 outlets offering its services across 200 countries.