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Image source: MoneyGram International, Inc.

What happened

Shares of MoneyGram International, Inc. (NASDAQ:MGI) are up by about 10% as of 10:30 a.m. EST after the company announced that it would be acquired by an Alibaba (NYSE:BABA) affiliate, Ant Financial Services Group.

So what

The terms call for Ant Financial to pay $13.25 in cash for MoneyGram shares, an 11.5% premium to their closing price on Wednesday. MoneyGram announced that its board of directors approved the deal and that insiders and a private equity group that owns about 46% of the company agreed to vote in favor of the transaction.

MoneyGram expands AliPay's global footprint. The company listed 350,000 agent locations in over 200 countries and territories in its third-quarter presentation. Standalone money transfer businesses have been a hot commodity in recent years. PayPal acquired money transfer company Xoom in 2015. 

Now what

With MoneyGram shares trading at a mere 2% discount to the offering price, Wall Street is pricing in very little risk that the deal will fall apart. MoneyGram said in a press release that it expects the deal to close sometime in the second half of 2017.

Jordan Wathen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends PayPal Holdings. The Motley Fool has a disclosure policy.