MGI/Ant Financial: Schumer CFIUS Letter Raises Red Flags for Data-Centric Deals; Full Letter Enclosed

Relevant Document:

Schumer Letter to Mnuchin

Event Driven Takeaways

  • A letter from Senate Minority Leader Chuck Schumer (D-NY), Banking Committee Ranking Member Sherrod Brown (D-OH), and Sen. Michael Bennet (D-CO) could put MGI/ANT firmly in CFIUS’s crosshairs as lawmakers raise national security concerns over “certain state actors” acquiring personally identifiable information (PII) of government and military employees.
  • “CFIUS needs to consider whether a transaction will give a foreign acquirer or government access to personally identifiable information or sensitive financial information of U.S. citizens that they would not otherwise have access to,” an early copy of the letter said. The letter is to be sent tomorrow morning, according to a Schumer spokesman.
  • The letter follows earlier reporting by Event Driven flagging the possibility of the deep pool of transaction data held by Moneygram, in addition to PII, as possibly of concern to CFIUS, according to interviews with multiple CFIUS practitioners.
  • A Bloomberg story earlier today on the Schumer letter sent MGI shares into a tailspin. The letter likely provides a layer of bipartisan political cover should the Trump Administration move to block the transaction. Not only does Schumer lead the Democrats but any legislative reform of CFIUS will need the support of Sherrod Brown who leads the Democrats on the Senate Banking Committee, which has jurisdiction.

Ant Financial’s bid to acquire Moneygram just gained significant opposition following a letter from Senate Democratic leaders  calling for CFIUS to seriously consider if transactions would grant foreign governments, or acquirers connected to a government, access to personal identifiable information. MGI/ANT is the most obvious deal currently at CFIUS with such concerns. The Senate’s top Democrat, Chuck Schumer (D-NY) is asking CFIUS to consider the national security concerns of “certain state actors” - a lightly-veiled reference t