- Western Union has reportedly made a takeover bid for MoneyGram, a news that could severely affect Ripple and XRP.
- Sources indicate that Western Union may have made an initial offer which is under review by MoneyGram.
A rumor indicates that payment giant Western Union may be on the verge of acquiring Ripple’s partner MoneyGram. Ripple made a $50 million investment in MoneyGram in 2019. After that became one of the most important partners of Ripple while using the payment solution, On-Demand Liquidity (ODL), which uses the XRP digital asset. As stated by MoneyGram, ODL allowed MoneyGram to reduce its transaction fees by 75%.
Western Union is a U.S.-based company that provides money transfer services in more than 200 countries. The company is a global market leader with a 17% share, 12,000 employees worldwide, assets valued at $9 billion and an operating income of $1.1 billion.
Details on the possible acquisition of Ripple’s partner
The rumors of the acquisition originate from a source cited by Bloomberg. According to the news agency, a source not identified said that Western Union made a takeover bid. MoneyGram is reportedly reviewing Western Union’s offer to make a decision.
However, it should be noted that this is not the first time that rumors of an alleged takeover of MoneyGram by Western Union have arisen. In 2015 there were also strong rumors, but both companies were in an adverse economic situation. MoneyGram was eventually acquired by an Alibaba firm in 2017. The purchase was valued at $880 million.
According to the source, the purchase would be a takeover of MoneyGram. As a result, there could be tensions between the parties and the process could trigger a certain animosity. In the 1990s, both companies were owned by First Data, but MoneyGram was split off under pressure from the Federal Trade Commission (FTC). The US regulator urged First Data to divest MoneyGram to prevent a monopoly in the market.
As reported by CNF, Western Union has already shown interest in the payment solutions of Ripple in the past. A Credit Suisse report states that Western Union continues to see potential in the digital asset and is testing its use cases. It was initially thought that Western Union had lost interest due to statements by its CEO, Hikmet Ersek, who said the company operates its own transfer system that is more efficient than XRP. But this was refuted by the Credit Suisse report.
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Ultimately it remains to be seen which implications arise from the possible acquisition of MoneyGram by Western Union. For Ripple, the takeovers could be massively bullish on the one hand, but on the other hand the acquisition might also mean a loss one of its most important partners.
