Alibaba’s Ant Financial is buying MoneyGram for $880M to expand its global presence

Alibaba is taking a big step into the U.S. — but it isn’t necessarily what you might think.

Its affiliate Ant Financial has revealed it is buying U.S. payments firm MoneyGram for $880 million. Ant Financial is paying $13.25 per share for NASDAQ-listed MoneyGram, a jump on the $11.88 price it held at the beginning of trading on Wednesday. The deal is subject to regulatory approvals and is expected to close in the second half of this year.

Dallas-based MoneyGram is a service that handles cross-border currency transfers — remittance payments — in close to 200 countries, where it claims to have 350,000 physical locations. The company recorded $1.4 billion in revenue in 2015, but just 13 percent of which was from digital transactions highlighting its massive offline presence.

This acquisition is in line with Ant Financial’s ongoing globalization push.

The firm backed Indian mobile payment firm Paytm back in 2015 — with Alibaba then joining it in doubling down via a further investment — while it has also expanded into Southeast Asia by acquiring a stake in Thailand-based Ascend Money. Those deals expand its tentacles beyond China, where Ant Financial’s Alipay is the dominant mobile payment service with 450 million users.

MoneyGram’s global reach vastly outstrips that of Paytm or Ascend money, and Ant Financial said in a statement that it “will provide greater access, security and simplicity for people around the world to remit funds, especially in major economies such as the U.S., China, India, Mexico and the Philippines.”

Ant Financial is tipped to go public in the next year or two, potentially in China, eschewing the path taken by Alibaba which held a record U.S. IPO worth $25 billion in 2014. Last year, Ant Financial raised a colossal $4.5 billion funding round at a valuation of $60 billion. Investors included sovereign wealth fund China Investment Corp (CIC), CCB Trust, a subsidiary of China Construction Bank, China Life, China Post Group, China Development Bank Capital and Primavera Capital Group.