Amex GBT and CWT Contest Findings from the CMA Merger Investigation

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American Express Global Business Travel and CWT have expressed several concerns regarding the U.K. Competition and Markets Authority’s (CMA) decision to intensify its investigation into their proposed $570 million merger.

In a joint response submitted on August 23 and made public on Friday as part of the ongoing inquiry, the travel management companies (TMCs) countered various conclusions made during the CMA’s Phase 1 investigation. They argued, among other points, that the authority’s concerns regarding a significant decrease in competition are baseless.

The TMCs asserted that the CMA exaggerated their combined market share, overstated the challenges faced by new entrants to the market, and uncritically accepted suppliers’ claims that GBT could hinder the advancement of NDC—a statement they claim lacks factual support.

The 55-page response, which contains numerous redacted sections, also pointed out that the TMCs are not each other’s primary competitors and instead highlighted BCD Travel as a closer competitor. They emphasized the capability of multiple rivals to cater to global multinational (GMN) customers.

“The market for business travel services is highly competitive, featuring a large number of strong competitors catering to customers of all sizes,” the TMCs stated. They asserted that the merged entity would “continue to face significant competition from at least four global competitors,” specifically mentioning BCD Travel, FCM, CTM, and Navan. These companies possess “the credibility and track record to secure contracts from customers with both complex and straightforward needs.”

Additionally, the statement noted that the CMA’s decision to escalate the investigation did not reflect the rapidly evolving nature of the market, where “customers are increasingly seeking digital solutions” and “TMCs are offering global coverage through technology, travel partner networks, and business process outsourcing.”

The TMCs also argued that there is no distinct market for global multinationals and small to medium-sized enterprises (SMEs) with complex requirements. They claimed that businesses of all sizes have a “continuum of needs that all TMCs can accommodate.”

According to the TMCs, the CMA leaned too heavily on information from BTN’s Corporate Travel 100 and Europe’s Leading TMCs reports. “The CMA’s decision relied on BTN’s 2023 Corporate Travel 100 survey to conclude that ‘only a few TMCs’ can meet GMN needs. However, the survey’s results are predominantly U.S.-focused and pertain only to air volume, making it unrepresentative of the global market considered in the decision.”

The statement concluded: “The competitive assessment and conclusions reached were incorrect in many respects. The merger will not lead to a substantial lessening of competition (SLC) in the supply of business travel agency (BTA) services to GMN customers or any others.”

It added: “The evidence demonstrates that the business travel market is highly competitive, fragmented, and dynamic; the parties are not each other’s closest competitors, and the merged entity will be constrained by more than five robust competitors and its discerning and powerful customers post-merger.”

The CMA is expected to deliver its Phase 2 report by January 26, 2025, and the acquisition must also gain regulatory approval in the U.S. After the confirmation of the Phase 2 investigation in August, Amex GBT indicated it anticipates completing the acquisition of CWT in the first quarter of 2025. Initially announced in March, the TMC expressed hopes to finalize the deal in the second half of 2024.

Originally published by BTN Europe.

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