Ant, the payment affiliate of Chinese e-commerce giant Alibaba Group Holding (BABA), dominates the online payments industry in China. With this acquisition it will significantly expand its presence overseas, as competition from domestic rival Tencent Holdings’ (TCEHY) Wechat payment system heats up.

The offer of $13.25 per share is at a premium of 11.5% to MoneyGram’s Wednesday’s close. MoneyGram’s shares were trading up nearly 9% at $12.92.

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The companies said the deal would be subject to approval by the Committee on Foreign Investment in the United States (CIFIUS), a U.S. inter-agency panel that reviews foreign acquisitions of domestic assets for national security concerns. CIFIUS has been a stumbling block for several Chinese deals in the Unites States.

Ant’s acquisition of Dallas-based MoneyGram comes against a backdrop of rising tensions between China and the United States over President Donald Trump’s willingness to re-evaluate key foreign policy conventions such as the “One China” principle. He has also threatened to impose punitive tariffs on Chinese imports.

Trump has, however, met with Jack Ma, the billionaire founder of Alibaba, since his election, describing Ma as “smart” and “open-minded.”

MoneyGram, alongside competitor Western Union, has long dominated the money transfer industry with its large network of retail locations. It has about 350,000 outlets in retail shops, post offices and banks in nearly 200 countries and territories.

Over the past few years, however, brick-and-mortar incumbents have been facing growing competition from more tech-savvy companies that are able to offer cheaper services online.

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The combination of Ant’s technological expertise and MoneyGram’s large network of agents and established brand could be a game-changer for the industry by leading to more consumers, including migrant workers sending remittances home, to use online transfer services rather than taking cash to storefronts, experts said.

“The combination is a powerful one: leading-edge technology with global reach and a significant physical footprint. Innovation and trust in one bundle,” said Warren Mead, global co-head of fintech at KPMG. “I expect to see the ever increasing convergence of fintech and the more traditional financial services sector.”

REMITTANCES ‘A REALLY INTERESTING BRIDGE’

China’s financial technology companies are on the rise, boosted by rapid digitization and the rise of a mass middle class at home. Chinese fintech “dragons” accounted for 46% of all venture capital investments in fintech globally in the first nine months of 2016, according to a report by Citigroup Inc.

Ant raised $4.5 billion in a record funding round in April, valuing the company at about $60 billion, the same as American Express Co or insurer Chubb and more than any other privately held fintech company.

Ant has been using its financial firepower to expand at home and overseas as it prepares for a planned initial public offering this year.

MoneyGram would be Alibaba‘s second acquisition in the United States. Last year, the company bought EyeVerify, a maker of optical verification technology used by U.S. banks.

“The large Chinese fintechs have been active across the developing markets for quite some time now,” said Imran Gulamhuseinwala, global head of fintech at EY. “We expected them to come to the U.S. and Europe and the remittance space represents a really interesting bridge between the two.

The deal comes as the Trump administration commences a crackdown on illegal immigration, which could impact remittances, the money that migrants workers send home. Prior to taking office, Trump threatened to halt money transfers from Mexican nationals unless Mexico agreed to pay for the massive wall he plans build on the U.S. southern border to keep out illegal immigrants.

Daumantas Dvilinskas, chief executive officer of money-transfer startup TransferGo, said restrictions on immigration would have a negative impact on outflows from the specific country implementing the change, but that it was unlikely to have significant impact on the global $550 billion remittances market.

“I don’t believe it will stop the prevailing growth of the global migrant segment,” Dvilinskas said.

MoneyGram’s biggest shareholder, private equity firm Thomas H. Lee Partners, which has a 44.5% stake, agreed to vote in favor of the deal, the companies said.

The company faced a serious liquidity crunch in 2008 after investing in subprime and other risky asset-backed securities, but it was rescued through a $1.5 billion equity and debt deal clinched with Goldman Sachs Group Inc and Thomas H. Lee Partners.

Ant Financial said it would assume or refinance MoneyGram’s outstanding debt, which stood at $937.3 million on a net basis as of Sept. 30, according to a regulatory filing.

Alex Holmes will remain MoneyGram’s chief executive and the company will continue to be based in Dallas.

Citi is Ant Financial’s financial adviser, while Simpson Thacher & Bartlett LLP is its legal adviser.

MoneyGram is being advised by BofA Merrill Lynch and legal firm Vinson & Elkins LLP.

The companies said the acquisition was expected to close in the second half of 2017.

This story has been updated.