The Competition and Markets Authority (CMA) about-turn on the merger of corporate travel giants Global Business Travel (Amex GBT) and CWT “will damage” its reputation, “undermine its credibility” and “give room for speculation about the independence and integrity of the CMA”.
That is according to Norwegian travel management company (TMC) Berg-Hansen, a partner of CWT, in an angry response to the CMA announcement in February that GBT’s $570-million takeover of CWT “should be allowed to proceed”.
A CMA inquiry group interim report in November had found the merger, announced last March, likely to “substantially lessen competition” in corporate travel service provision to global multinationals.
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But it reversed this decision in a ‘supplementary interim report’ following “further analysis” and gave industry players just seven days to respond, having suggested the decision was “finely balanced”.
In response, Berg-Hansen said it was “very surprised by the CMA’s U-turn”, describing the arguments used to arrive at the new conclusion “speculative and tendentious”, and warned: “If allowed to stand, it will damage the CMA’s reputation.”
It accused the CMA of making “completely unfounded” and “speculative and baseless arguments” to change its view of the effects of the merger” which “would be disastrous for the TMC industry and its customers” and demanded the CMA “revert to its previous conclusion and block the transaction”.
The company criticised “the extremely short period afforded interested parties to submit comments” and accused the CMA of “speculative guesswork” and “using rumours and unfounded opinions to support ill-conceived conclusions” which should “be disregarded completely”.
It noted: “Berg-Hansen is a long-time partner of CWT in Norway [where it] services global multinationals on CWT’s behalf.”
Berg-Hansen told the CMA: “If the transaction is allowed, we expect all current CWT partnership agreements to be terminated by GBT . . . thus accelerating the process toward further GBT dominance.”
By contrast, GBT and CWT welcomed the CMA’s “revised provisional conclusion” but challenged some of the reasoning behind it.
In a joint statement, they suggested global multinational companies “do not have unique requirements” for business travel and that “customers of all sizes have substantially similar needs . . . and can be served by many capable TMCs”.
The companies also insisted they “do not consider the case to be ‘finely balanced’” in favour of the merger.
A final decision is due by March 9.