The proposed merger between Amex Global Business Travel and CWT Holdings has sparked significant regulatory concerns.
- This merger of two major travel management entities could limit market competition, as identified by the Competition and Markets Authority (CMA).
- The CMA has provisionally found that the merger would result in a single dominant company with more than double the market share of its closest competitor.
- Amex GBT has expressed disagreement with these findings, citing the competitive nature of the industry and new market entrants.
- The investigation is ongoing, with responses to the interim report due by the end of November.
The proposed merger between Amex Global Business Travel (GBT) and CWT Holdings is under scrutiny after the Competition and Markets Authority (CMA) expressed substantial concerns. The CMA’s provisional findings suggest that the merger could significantly lessen competition in the market. This has been a key point of contention, with the combined entity expected to become a dominant market player.
The CMA’s investigation, part of its Phase 2 merger inquiry, determined that the merger would make Amex GBT and CWT the clear leader in the corporate travel management sector. Evidence, including supply estimates and customer feedback, indicates that the two companies are close competitors for multinational clients due to their scale and reach. The loss of competition could lead to fewer choices and higher prices for customers.
This merger marks the first investigation under the CMA’s new process for ‘Phase 2’ merger assessments. The authority has set a deadline of 27 November for stakeholders to respond to the provisional findings. CMA Chair Martin Coleman emphasised the ongoing importance of business travel despite growing reliance on video conferencing, stressing its role in economic activity and productivity.
Amex GBT has expressed its dissatisfaction with the CMA’s interim report. Eric Bock, Amex GBT’s Chief Legal Officer, argued that the CMA overlooked the vibrant competition present in the business travel sector. He highlighted the growth and diversification of travel management companies, suggesting that the proposed merger would not impair market competitiveness.
The outcome of this investigation is being closely watched, with significant implications for the business travel industry in the UK. The US Department of Justice is also reviewing the transaction, adding another layer of complexity to the proceedings. Amex GBT remains hopeful that the deal will proceed, expecting closure in early 2025.
The ongoing scrutiny of the merger between Amex GBT and CWT highlights the delicate balance of competition in the UK travel sector.
