The UK's Competitive and Markets Bureau today cleared the $570 million acquisition of CWT's CWT, but the merged still faces regulatory hurdles in the US following the antitrust law raised by the Department of Justice (DOJ).
According to a statement issued by the CMA, “The group concludes that CWT is a significantly weaker competitor than in the past and is likely to continue to be weaker in the future, and that there are other suppliers who will provide customers with alternatives to the merged business.”
“The group therefore cleared the transaction, satisfied that the merger is not expected to result in a significant reduction in competition in the global market for the supply of business travel agency services.”
Martin Coleman, chairman of the independent panel of experts conducting the investigation, said:
In a summary of the final report released Thursday (March 6), the CMA cited CWT's “continuous financial difficulties,” saying, “its financial position is unlikely to improve and could face a trajectory of continuing to lose more business than it potentially acquires.”
“Our bid analysis confirms that BCD and GBT are two of the strongest competitors on the market, both of which are considerably stronger than CWT.”
BTN Europe also investigated the weakening location of the CWT following long-term inquiries.
In addition to the “strong competition” from BCD, the CMA said AMEX GBT and CWT “currently face important competitive constraints from FCM and are facing an increase in constraints from CTM and Navan as they continue to grow.”
Amex GBT welcomed the CMA decision. In a statement Thursday, Eric J. Bock, TMC's Chief Legal Officer and global head of M&A, said the development “reinforces our belief that lawsuits launched by the U.S. Department of Justice are fundamentally flawed, narrow and outdated views of competition, and ignore the emergence of many important competitors in business trips.
“We stand by the benefits of combining it with CWT and are confident in the merits of our legal position. We are ready to prove this in court if necessary,” he said.
The planned deal was first revealed in March last year, with CMA unveiling an investigation into the June takeover. In the summer, he identified competitive concerns and said the merger could lead to customers paying higher prices before escalating the investigation.
Amex GBT and CWT challenged the CMA findings under investigation, proposed remedies to alleviate concerns, criticising the process and the “backward-looking” nature of its approach.
In January, the US DOJ filed a lawsuit blocking the merger of the two TMCs, and the trial was confirmed in September. In February, the UK CMA issued an updated preliminary report that pointed to CWT's weakening position and extensive TMC bid data and evaluation of business victory, overturning the initial proposal to block transactions.
•Reference: Creating Headings – Amex GBT-CWT MEGAMerger
As reported in BTN Europe, American Express Global Business Travel's timeline for CWT acquisition proposal
