CMA warns major corporate travel takeover could hike prices and worsen service
Amex GBT, the largest travel management company in the UK, announced a £444m deal to takeover rival CWT in March.
A major planned acquisition in the corporate travel sector could lead to higher prices and poorer quality of service, the Competition and Markets Authority (CMA) has warned.
American Express Global Business Travel, the largest travel management company in the UK, announced a £444m deal to takeover rival CWT in March. CWT is the third-largest firm operating in the UK market and supplies business travel agency services to corporate customers around the globe.
The CMA said it was concerned the merger could lead to “worsened quality of service, higher prices and/or reduced innovation efforts for global multinational business travel customers.”
The UK’s antitrust regulator on Tuesday launched an inquiry into whether the deal would result in a “substantial lessening of competition” in the market. The two parties have until 6 August to offer undertakings to address the issues raised.
A further “Phase Two” investigation will be launched should no undertakings be offered or the CMA decides that any undertaking offered is “insufficient to remedy its concerns.”
Mike Walker, Chief Economic Advisor at the CMA, said: “We’re concerned this deal between major suppliers of business travel agency services would reduce the pool of providers of these services to GMN customers, which could lead to worse services and higher prices for GMN customers.
“It is now up to GBT and CWT to offer solutions to our concerns, otherwise this case will proceed to a more in-depth Phase 2 investigation.”
CWT and GBT have been approached for comment.
Both CWT and Amex GBT are based in the US, with Amex GBT holding a listing on the London Stock Exchange.
