American Express Global Business Travel has made a binding offer to acquire Egencia, Expedia’s corporate travel arm.
As part of the transaction, which is subject to regulatory approvals, Expedia Group will become a shareholder in GBT and enter into a long-term strategic commercial agreement with the TMC.
Scott Gillespie, travel management expert with consultancy group tClara, said the tie-up could be “the catalyst for consolidating, if not transforming managed travel across Europe and North America”.
He told The Business Travel Magazine: “Yes, there are sound business reasons why this deal makes sense for both parties, but think about the cascading impact it could have on the industry. Could BCD and CWT feel compelled to merge, or might Booking Holdings acquire one or both mega TMCs? Might Microsoft buy Amadeus? Might Google buy Sabre?
“Bigger is usually better for suppliers and distributors in mature industries. Expect more consolidation like this.”
Terms of the agreement have not been disclosed but more detail is expected to be revealed in an Expedia earnings update on Thursday.
An announcement on Tuesday said GBT would continue to invest in the Egencia brand, its people and technology.
A spokesman added that there were no immediate plans for redundancies or senior management changes.
He also said the deal had not come about because of the impact of the pandemic.
“M&A has been a component of GBT’s strategy for some time and we are always exploring strategic opportunities to accelerate growth and deliver even better solutions to clients and travellers,” he said.
Paul Abbott, GBT’s CEO, added: “Egencia would be strengthened by GBT’s complementary technology, enterprise capabilities and cutting-edge content. This would create new opportunities for both multinational and small and medium-sized enterprise clients, suppliers and the talented teams within both organisations.”
Amex GBT said with both the Egencia platform and its own Neo Technology Group, the business would be “positioned to build the best solutions for the future of business travel”.
President of Expedia Business Services Ariane Gorin said: “We are thrilled by the potential transaction and what GBT and Egencia could achieve together, as Expedia Group seeks to simplify our business and be a leader in all of our endeavours. The combination of GBT’s leading solutions with Egencia’s great technology and team would help create the world’s best business travel offerings for customers and suppliers.
“At the same time, a greatly expanded, long-term accommodations supply agreement with Expedia Partner Solutions (EPS) would enhance GBT’s Supply MarketPlace and meaningfully further Expedia Group’s goal of powering businesses across the entire eco-system.
“Expedia Group strongly believes in the robust return of travel, including in the corporate space. We’re excited about our potential ownership in GBT and our long-term arrangement to power Egencia and GBT, as we do for thousands of other travel companies.”
