American Express Global Business Travel is set to acquire its rival CWT for $540 million following the US Department of Justice’s decision to remove antitrust obstacles against large travel management firms.
The DOJ had contended that merging AMEX GBT and CWT—both of which are among the top three players in the business travel management sector—would create an environment that is too concentrated, potentially limiting choices for global companies. This argument was dismissed recently, with the lawsuit originally scheduled for a hearing in September.
A Long Wait
The merger has been on hold since it was first announced in March 2024. The UK’s Competitive Markets Authority was the first to pause the deal, citing concerns raised by an independent research group. They argued that the merger could reduce options and raise prices for larger clients, defined as those companies with an annual trading volume of at least $25 million. AMEX GBT publicly disagreed, asserting that the CMA’s conclusions misrepresented the dynamic and competitive nature of the business travel industry.
The CMA continued its review and delayed its decision until January 2025. Meanwhile, the DOJ challenged ten other mergers under the Biden administration, calling AMEX GBT’s situation a “politically motivated” lawsuit and claiming it relied on outdated assessments that did not accurately reflect the current competitive environment.
Amid this heightened scrutiny, AMEX GBT has pushed its projected merger completion date to October 2025. There have been indications that the process could indeed take longer. The DOJ initially declined to pursue litigation against the company and did not support the legal proceedings scheduled for May. As the situation unfolded, some TMCs even invoked a “failing firm” defense for CWT in February, which they hoped would bolster their merger case. While the court date had been set for September, AMEX GBT and CWT were looking to establish December 31, 2025, as the final deadline for the merger. However, a surprising shift from the CMA in February altered the merger’s trajectory, with UK observers ultimately approving the deal in March.
A Synergistic Effect is Expected
“We know that the regulatory approval process has caused uncertainty for both CWT’s clients and employees. We’re eager to finalize the deal and welcome CWT into AMEX GBT,” said a spokesperson.
CWT CEO Patrick Andersen expressed satisfaction with the DOJ’s conclusion, stating, “Our clients and staff have an exciting future as we focus on concluding transactions and merging with AMEX GBT.”
The companies anticipate that the transaction will yield around $155 million in net synergies across their operations in over 140 countries. The deal includes about 50 million shares priced at $7.50 each, while the rest will be paid in cash. CWT shareholders will retain around 10% of the firm.
How Do Buyers Respond?
A travel consultant, working with BTN Group recently, commented on the industry’s tendency to hold onto contracts while waiting for the merger’s regulatory outcome.
Caroline Strachan, CEO of Festive Road, shared insights from buyers, noting that many have extended their contracts or are waiting to see how the merger plays out. Nevertheless, she anticipates a rise in demand for proposals from travel management companies once the DOJ’s decision is finalized. After that point, Strachan predicts that there may be no bids from customers who lack established relationships with preferred bidders. She advised buyers to consider “wild card” options that could fit their needs.
Charles Bacharach, Senior Vice President at Areka Consulting, indicated to BTN that they have noticed a thaw in TMC request-for-proposal activity.
“We’ve seen that uncertainties around mergers affect RFP outcomes,” Bacharach said during the BTN Intelligence Panel in May. “Many CWT clients are eager to clarify their options and how this will ultimately resolve.”
•Reference: Timeline of proposed acquisitions as reported in BTN Europe.
