- The UK’s Competition and Markets Authority has today cleared American Express Global Business Travel’s $570 million acquisition of CWT, however the merger stills faces a regulatory hurdle in the US following an antitrust lawsuit filed by the Department of Justice (DOJ).
A statement issued by the CMA said: «The group has concluded that CWT is a significantly weaker competitor than in the past and is likely to continue to weaken in the future and that there are other suppliers who will offer customers an alternative to the merged business.»
It continued: «The group is therefore satisfied that the merger is not expected to result in a substantial lessening of competition in the global market for the supply of business travel agency services and has cleared the deal.»
Martin Coleman, chair of the independent panel of experts conducting this investigation, said: «Having reviewed all the evidence thoroughly over the course of our investigation we have concluded, given the weaker position CWT plays in the corporate travel market and the alternatives available, that this deal should be allowed to proceed.
In a summary of its final report released on Thursday (6 March), the CMA cited CWT’s “continuing financial difficulties” and that “its financial position is unlikely to improve and it potentially faces a trajectory of continuing to lose more business than it will gain».
It continued: «Our bidding analysis has confirmed that BCD and GBT are the two strongest competitors in the market, by far, and both are substantially stronger than CWT.”
BTN Europe also examined CWT’s weakening position following the protracted inquiries.
In addition to “strong competition” from BCD, the CMA said Amex GBT and CWT «currently face a material competitive constraint from FCM and face an increasing constraint from CTM and Navan as they continue to grow».
Amex GBT welcomed the CMA decision. In a statement on Thursday the TMC’s chief legal officer and global head of M&A, Eric J. Bock, said the development “further reinforces our belief that the lawsuit initiated by the US Department of Justice is fundamentally flawed, taking a narrow and outdated view of competition, and disregarding the emergence of numerous significant competitors in business travel.
“We stand by the benefits of combining with CWT and are confident in the merits of our legal position. We are prepared to prove this in court if required,” he said.
The planned deal was first revealed in March last year, with the CMA announcing an investigation into the acquisition in June. In the summer, it identified competition concerns and said the merger could lead to customers paying higher prices, before escalating its investigation.
Amex GBT and CWT challenged the CMA’s findings throughout its investigation, proposed remedies to allay its concerns, and criticised its processes and the «backward-looking» nature of its approach.
In January, the US DOJ filed a lawsuit to block the merger of the two TMCs, with a trial confirmed for September. In February, the UK’s CMA issued an updated interim report in which it reversed its initial proposal to block the deal, pointing to CWT’s weakening position and an assessment of extensive TMC bidding data and business wins.
Artículo publicado originalmente por businesstravelnewseurope.com
