US Files Antitrust Suit to Block Amex GBT-CWT Travel Merger (4)

The US Justice Department filed a lawsuit to block a $570 million deal in the corporate travel market over antitrust concerns.

In a complaint filed Friday in federal court in New York, antitrust enforcers said American Express Global Business Travel Group Inc.’s acquisition of rival CWT Holdings would harm the market for travel management.

“If completed, this deal would extinguish fierce head-to-head competition between Amex GBT and CWT and risk higher prices, fewer choices, and less innovation, thereby threatening harm to scores of businesses crucial to the US economy,” according to the suit.

The administration of President Joe Biden has made antitrust enforcement and competition policy a central piece of its economic agenda. The case is one of its final acts to police what it believes is excessive concentration of power across the economy. Managing the lawsuit would fall to the incoming administration of Donald Trumpand to Gail Slater, his pick to run the antitrust division.

UK Review

The companies, which help corporate customers manage travel and event planning, met earlier this week with senior leadership at the Justice Department’s antitrust division to argue in favor of the deal, Bloomberg News previously reported.

Read More: DOJ Readying Lawsuit Seeking to Block Corporate Travel Merger

Amex GBT said it was evaluating next steps but criticized the Justice Department’s complaint as focused on a small segment of customers and failing to recognize changes to the travel since the pandemic.

“We continue to believe that, if allowed to close, the proposed transaction will create significant synergies and provide greater capacity for Amex GBT to continue to invest and innovate with new and better services for all customers and business travelers,” the company said in a statement.

CWT declined to comment on the lawsuit.

The UK’s Competition and Markets Authority has also raised concerns the deal would harm competition, releasing an interim report in early November that focuses on multinational companies with annual travel budgets over $25 million.

The CMA has a late January deadline to decide whether to block the merger. The companies offered to impose price caps and open CWT’s travel partner network to competing travel companies to obtain UK approval, and potentially offload some CWT customers to competitors as well.

Big Players

American Express Co. owns a minority interest in Amex GBT after spinning off the company in 2014. CWT is majority-owned by investment firms including Redwood Capital Management and Monarch Alternative Capital. The deal was announced in March. The companies have said they plan to close the deal in the first quarter.

The companies maintain that they operate in a competitive market, pointing to others including BCD Travel and Navan Inc.

Internally, Amex GBT has identified CWT as one of its biggest competitors for travel management services for large customers, the US claims.

Amex GBT managed $28 billion in business travel transactions in 2023, making it the largest provider of those services, the Justice Department said in the suit. CWT is the third biggest, with about $14 billion in transactions. Along with BCD, the No. 2 player, the three largest travel management companies control at least 70% of the market for travel management for global companies that spend at least $30 million annually, the US said.

The case is US v. Global Business Travel Group Inc., 25-cv-00215, US District Court, Southern District of New York (Manhattan).

(Updates with Amex GBT statement starting in sixth paragraph.)

To contact the reporters on this story:
Josh Sisco in San Francisco at jsisco6@bloomberg.net;
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Peter Jeffrey, Peter Blumberg

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