The UK’s Competition and Markets Authority (CMA) has changed its stance on the American Express Global Business Travel-CWT merger and has “provisionally” said that the deal should now be allowed to proceed.
Amex GBT said the CMA’s announcement was an “important milestone toward the consummation of the transaction” but the merger still faces the hurdle of the lawsuit filed by the US Department of Justice (DOJ) earlier this year.
The CMA previously said the merger between two of the world’s largest travel management companies was “likely to substantially lessen competition” for global multinational (GMN) customers and launched an in-depth “phase two” investigation into the deal last year.
But after the inquiry panel carried out further research and analysis on the state of the market for GMN clients, it has now issued a further supplementary report that “sets out why the group provisionally considers that the deal should be allowed to proceed”.
“Following the interim report, the CMA has continued to gather evidence and has carried out further analysis that suggests CWT would not have performed as strongly absent the merger as the group had initially assessed,” said the CMA in a statement.
“As a result, and having considered all the evidence in the round, the group has provisionally concluded that CWT is a significantly weaker competitor than in the past and is likely to continue to weaken in the future. There are other suppliers who will offer customers an alternative to the merged business.”
The supplementary interim report also noted that CWT’s financial position “is unlikely to improve and it potentially faces a trajectory of losing more business than it will gain”.
In addition, a review of TMCs’ bidding data confirmed the CMA’s position that Amex GBT and BCD Travel “are the two strongest competitors in the market, by far” but that the merged entities would “face a stronger competitive constraint from FCM than we previously thought and will also do so in future from CTM and Navan as they continue to grow”.
The CMA stressed that this was only a provisional finding and a final decision on whether the merger could proceed will be made by 9 March.
Martin Coleman, chair of the inquiry group, added: “In this case, having considered all of the evidence in the round, particularly the further analysis of CWT’s financial position, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in corporate travel management services.
“We will now consider feedback on our supplementary interim report before making a final decision in March.”
In the US, a judge has already set a trial date of 8 September to hear the DOJ's lawsuit to stop the merger.
Eric Bock, Amex GBT’s chief legal officer and global head of M&A, said: “The CMA’s revised findings reinforce the company’s belief that the DOJ’s lawsuit is fundamentally flawed, taking a narrow and outdated view of competition, and disregarding the emergence of numerous significant competitors in business travel.”
Paul Abbott, Amex GBT’s CEO, added: “If consummated, this transaction will accelerate investment and innovation in business travel, creating more choice and value for customers and suppliers, and more opportunities for CWT employees.”
The CMA’s inquiry group is now seeking feedback on its latest report before making a final decision by 9 March 2025. The deadline for comments is 25 February 2025.
• See also: Making headlines: a timeline of the proposed acquisition, as reported by BTN Europe.