The Competition and Markets Authority has asked Amex GBT and CWT to “offer solutions” to the watchdog’s concerns that their merger could lead to higher prices and worse service.
Amex GBT, the world’s largest travel management company, announced in March that it had agreed a $570 million deal to buy rival CWT.
In a statement on Tuesday (July 30), the CMA said it “is concerned that the merger could lead to worsened quality of service, higher prices and/or reduced innovation efforts for global multinational (GMN) business travel customers, as a result of combining the current largest and third largest company operating in this market”.
Following the merger, there would be a very small pool of providers capable of catering to the business travel needs of GMN customers, said the CMA.
It said the two companies have until August 6 to offer undertakings to the CMA about the concerns.
Mike Walker, CMA chief economic adviser, 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.”
Travel Weekly has approached Amex GBT for comment.