The UK competition watchdog has provided outline clearance to Amex GBT’s planned $570 million purchase of rival CWT in an about turn to its previous opposition to the deal.
The Competition and Markets Authority (CMA) yesterday published a supplementary interim report ahead of its final decision, setting out why it “provisionally considers that the deal should be allowed to proceed”.
This marks a change of tack from November when the competition body’s interim report found the proposed merger between GBT and CWT was likely to “substantially lessen competition”.
The CMA said: “Following the interim report, the CMA has continued to gather evidence and has carried out further analysis that suggests CWT would not have performed as strongly absent the merger as the group had initially assessed.
“As a result, and having considered all the evidence in the round, the group has provisionally concluded that CWT is a significantly weaker competitor than in the past and is likely to continue to weaken in the future. There are other suppliers who will offer customers an alternative to the merged business.”
It will now seek further feedback before making a final decision by March 9, with a deadline for comments set for is next Tuesday (February 25).
Martin Coleman, chair of the independent panel of experts conducting the investigation, said: “In this case, having considered all of the evidence in the round, particularly the further analysis of CWT’s financial position, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in corporate travel management services.
“This is our first investigation under the revised Phase 2 process, with several benefits including the publication of an interim report at an earlier stage and a higher level of business and third-party engagement with the inquiry group. Today’s supplementary report reflects the flexibility this new process provides.
“We will now consider feedback on our supplementary interim report before making a final decision in March.”
Amex GBT said it continues to defend itself against a lawsuit filed in January by the antitrust division of the US Department of Justice, seeking an injunction to prevent the proposed transaction.
Chief legal officer and global head of mergers and acquisitions Eric Bock said: “The updated provisional conclusions by the CMA is an important milestone toward the consummation of the transaction.
“The CMA’s revised findings reinforce the company’s belief that the DoJ’s lawsuit is fundamentally flawed, taking a narrow and outdated view of competition, and disregarding the emergence of numerous significant competitors in business travel.”
Company chief executive Paul Abbott added: “If consummated, this transaction will accelerate investment and innovation in business travel, creating more choice and value for customers and suppliers, and more opportunities for CWT employees.”
Amex GBT announced in March 2024 that it had agreed to acquire CWT, “subject to the satisfaction of customary closing conditions, including the receipt of certain regulatory approvals”.