The Competition and Markets Authority (CMA) confirmed today that it has referred the acquisition of CWT Holdings by the Global Business Travel (GBT) Group for “an in-depth investigation” after GBT gave notice it would not provide the necessary undertakings.
The CMA announced on July 30 it had decided the merger between leading travel management companies GBT (Amex Global Business Travel) and CWT (formerly Carlson Wagonlit Travel) could result “in a substantial lessening of competition” in the UK market “unless the parties offer acceptable undertakings to address these competition concerns”.
The authority noted “GBT informed the CMA that it would not offer such undertakings” on August 6.
The $570-million takeover, announced in March this year, would combine the largest travel management company (TMC) in the UK and Europe (Global Business Travel) with the fourth largest in the UK and the European number three (CWT).
Announcing the deal, Amex GBT chief executive Paul Abbott said the acquisition would “create more choice for customers and more value for shareholders”.
The CMA launched an initial investigation on June 4.
The authority noted its concern that “the merger could lead to worsened quality of services, higher prices and/or reduced innovation efforts for global multinational business travel customers as a result of combining the current largest and third largest company operating in this market”.
CMA chief economic adviser Mike Walker said: “We’re concerned this deal between major suppliers of business travel agency services would reduce the poll of providers of these services to customers.”
The inquiry group will be chaired by Martin Coleman, CMA non-executive director and panel inquiry chair, and comprise Colleen Keck, a member of the CMA’s specialist communications and utility panels; Juliet Lazarus, former director of competition at the Office of Rail and Road; and John Thanassoulis, professor of financial economics at the University of Warwick business school.