Western Union headquarters at One Belleview Station in Denver, April 2020. Xnatedawgx / Wikimedia Commons, CC BY-SA 4.0; cropped. File photo.
Western Union has terminated its agreement to acquire International Money Express, ending a deal pursued for more than a year after the company rejected conditions attached to California’s regulatory approval.
The Denver-based money transfer company said California’s Department of Financial Protection and Innovation delivered final conditions on the evening of November 10 that would have required material changes to its business model, agent relationships and long-term strategy. Western Union’s board decided to terminate the merger agreement after reviewing the transaction with management and its legal and financial advisers.
California did not deny the acquisition. The regulator announced conditional approval Tuesday, saying its requirements were intended to prevent fraud and scams, protect against money laundering, and preserve competitive access to money transfer services.
Those requirements included stronger agent oversight, steps to detect and deter fraud, restrictions on limiting consumers’ choices at agent locations, and safeguards against materially reducing the combined companies’ agent network.
Western Union described the final conditions as unacceptable and not in the interests of the company, its agents or shareholders. It said California had not identified a failure by the company to comply with legal requirements governing fraud prevention, money laundering or fair customer access, and said it remains in compliance with its Federal Trade Commission consent order.
Neither Western Union nor Intermex is required to pay the other in connection with the termination, according to the company’s announcement.
“While we are disappointed that we were unable to complete the acquisition on terms that were acceptable to Western Union, we believe this course of action is in the best interests of the company and its shareholders,” Chief Executive Devin McGranahan said.
The regulator said it reopened its earlier conditional approval in August to conduct a fuller review after changes in the remittance market and federal policy. Western Union said it had secured approvals from other jurisdictions but could not accept California’s final terms.
The proposed combination would have brought together two large remittance networks. California said Intermex is particularly important for customers sending money to Mexico and Central America, with transfers commonly handled through independent businesses acting as agents.
JBizNews Desk | Business
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