The firms have terminated the deal due to the failure of securing approval from the Committee on Foreign Investment in the US (CFIUS).
Both firms announced that they plan to work together on new strategic initiatives in the remittance and digital payments markets.
As part of the new strategic business cooperation, the firms will explore and develop initiatives to offers enhanced money transfer services in China, India, the Philippines and other Asian markets, in addition to the US and other crucial global markets.
In January 2017, Ant Financial Services signed an agreement to acquire MoneyGram in a cash deal worth $880m.
In April same year, Ant Financial raised its offer price to $1.2bn for the acquisition of MoneyGram.
Under the amended agreement, Ant Financial agreed to acquire all of the outstanding shares of MoneyGram for $18 per share compared to earlier offer of $13.25 per share.
MoneyGram has secured a $30m termination fee, as per terms of the merger agreement.
MoneyGram CEO Alex Holmes said: "The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago.
“Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger.”
Ant Financial International president Doug Feagin said: "We remain excited and encouraged about Ant Financial's future prospects around the world as we continue to establish new partnerships and pursue opportunities that bring innovative services to our ecosystem.”
MoneyGram offers bill payment services, issue money orders and process official checks in select markets, in addition to money transfer services.
Image: MoneyGram products. Photo: courtesy of Raysonho.
