The US Department of Justice’s (DOJ) Antitrust Division has filed a lawsuit to block American Express Global Business Travel’s (Amex GBT) proposed US$570 million (R10,7 billion) acquisition of Carlson Wagonlit Travel (CWT), citing concerns over reduced competition.
The lawsuit, filed on January 10, alleges that the deal would harm competition for global multinational corporate clients by reducing TMC options, risking higher prices and less innovation.
“This acquisition is the latest in a series of acquisitions by Amex GBT that will further consolidate an already consolidated market with only a handful of competitive options capable of serving customers with the most need for travel management services,” said Doha Mekki, Acting Assistant Attorney General of the DOJ’s Antitrust Division.
The proposed acquisition is also under scrutiny in the UK, where the Competition and Markets Authority (CMA) has an open case on the transaction, as previously reported by Travel News.
Similarly, the CMA found that Amex GBT’s acquisition of CWT “gives rise to a realistic prospect of a substantial lessening of competition as a result of horizontal unilateral effects in the market for the supply of business travel agency services to global multinational customers globally”.
On January 16, the competition authority extended its deadline to make a final decision on the proposed acquisition by six weeks to March 9.
Amex GBT published a response to the UK CMA, regarding its findings, stating that its report did not reflect the evidence presented on the highly competitive and dynamic nature of the business travel sector.
Furthermore, Amex GBT claims that the segment of clients, global multinational businesses, only makes up a small fraction of business travel spend.
“The CMA has ignored multiple sources of evidence that show clearly that Amex GBT consistently competes for all customers, including the largest global customers, with numerous other travel management companies that operate globally,” said Amex GBT.
Amex GBT said it would work collaboratively with the UK CMA and the US DOJ to review the acquisition’s transaction, which it expects to complete within the first quarter of 2025.
