UK’s CMA Deepens Investigation into Amex GBT’s Acquisition of CWT

The Competition and Markets Authority (CMA) in the United Kingdom has announced a more detailed examination of American Express Global Business Travel’s (Amex GBT) acquisition of travel management company CWT. This investigation aims to scrutinize the potential implications for the business travel sector.

Amex GBT first revealed its $570 million acquisition of CWT in late March, with expectations of finalizing the deal by the second half of the year. However, the CMA’s concerns have introduced uncertainties into this timeline.

According to Yahoo, the CMA expressed worries that the merger could negatively impact service quality, pricing, and innovation for global multinational (GMN) business travel customers. The combination of the largest and third-largest companies in this market could result in a limited number of providers capable of meeting GMN customer needs, raising fears of reduced competition.

The CMA has given the involved parties until August 6 to address these concerns. Failure to do so will result in the merger being referred to a more “in-depth Phase 2 investigation.”

Read more: Daniel Lambauer to Take Over as COO of Competition and Markets Authority

Per Yahoo, the CMA’s initial inquiry included feedback from other industry participants. The regulator concluded that the merged entity would become the dominant market leader, with the competition from other suppliers, including traditional travel management companies and newer technology-driven entrants, being insufficient to counterbalance the merger’s impact.

In response, Amex GBT stated in June that it had “voluntarily notified” the UK regulator about the acquisition to seek antitrust approval. The company also mentioned that it is “working constructively with the CMA” to address the regulatory concerns.

Source: Finance Yahoo