The world’s largest travel management company (TMC) Amex GBT has agreed a $570 million deal to buy rival CWT.
Amex GBT reported revenue of almost £2.3 billion but a loss of £136 million for 2023 in results published earlier this month.
The company said the acquisition of CWT would add 4,000 clients to the 20,000 it has globally.
The deal is touted as taking advantage of the global recovery in business travel. Amex GBT chief executive Paul Abbott described himself as “bullish” on the prospects for business travel, claiming the market has a “massive runway for growth”.
Abbot noted the corporate travel recovery to date had been led by small and medium-sized companies but said: “What we’re going to see this year is a much more balanced picture.
“We’re going to see global multinational customers with healthy growth rates in a more stable growth environment.”
However, the corporate travel market has returned more slowly than that for leisure travel and visiting friends and relatives (VFR), with major airlines reporting corporate travel remains significantly down on 2019.
The shortfall in corporate demand appears due both to increased reliance on virtual meetings to replace shorter business trips, and to increasing efforts by large corporations to reduce their carbon footprints amid growing environmental reporting requirements.
The acquisition of CWT – previously known as Carlson Wagonlit Travel – by Amex GBT, formerly part of American Express, would mark the most significant consolidation in corporate travel to date and appears likely to attract scrutiny by competition regulators in the US and Europe.
Abbott said he expects consolidation to continue in a “very large, fragmented and growing industry”, arguing the industry needed to consolidate to deliver the digital tools and technology developments required by clients.
He said: “The level of investment required to meet customer expectations is significant – the best people, the best technology, the best software and services delivered consistently on a global basis.”
Amex GBT said that the deal would provide CWT customers with “more choice and value” and “greater capacity for investment in software and services
CWT chief executive Patrick Andersen said joining forces with Amex GBT would “help accelerate our vision of a tech-enabled future for business travel”.
He added: “We’re highly confident in the value creation of the combined company.”
The cash-and-equity deal for CWT is expected to close in the second half of this year.