The $540 million purchase of CWT by American Express Global Business Travel will go ahead after the US Department of Justice dropped its antitrust lawsuit against the deal.
Amex GBT CEO Paul Abbott in a statement: “We recognise the regulatory approval process has created uncertainty for CWT customers and employees. We’re excited to close the transaction and welcome them to Amex GBT. Together, we will offer customers unrivalled choice, value and experience.”
CWT CEO Patrick Andersen added: “We are pleased that the DOJ has come to this conclusion. Our customers and people have an exciting future ahead of them as we turn our focus to completing the transaction and integrating with Amex GBT.”
The DOJ’s lawsuit, filed in the US District Court for the Southern District of New York, argued that the proposed deal – the fifth acquisition by Amex GBT since 2018 – would harm competition for business travel management services to US global and multinational businesses.
It warned that American businesses will face the consequences “seeing higher prices, less innovation and fewer choices”.
But the lawsuit was dropped this week, allowing the deal to go ahead.
The decision in the US comes after the UK Competition and Markets Authority also did a U-turn.
It had initially found the deal would lead to less choice and higher prices among large customers but later concluded that this would not happen because “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”.
The decision was met with a mixed response in the industry.
Andrea Caulfield-Smith, Managing Director Global Business Travel of Advantage Travel Partnership, said: “This transaction consolidates two of the top three players in business travel management services resulting in reduced market competition and negatively impacting corporate customers, airlines, hotels and other travel suppliers. There needs to be global regulatory vigilance and true choice in corporate travel management.”
Industry consultant Martijn van der Voort said: “This is undoubtedly great news for CWT employees, but it’s worth taking a closer look at Amex GBT’s acquisition of CWT. In particular, we’ll examine relative job security, the opportunities this creates for rival TMCs, and the impact on corporate procurement teams.”
Bryan Holmes, founder of Bid Logic Solutions, said the deal creates an “unprecedented concentration of market power”.
“As the industry’s largest player by volume absorbs the third-largest, the negotiating table shrinks. This makes each sourcing decision exponentially more consequential for corporate programmes,” he wrote on LinkedIn.
“Smart procurement leaders are already adapting their playbooks. With fewer competitors to provide natural price tension, strategic sourcing must evolve beyond routine RFP exercises.”
