American Express Global Business Travel and CWT challenge UK Competition and Markets Authority Decided to upgrade investigation in their proposed $570 million merger.
As part of the ongoing investigation, the TMC refuted multiple findings in a joint response filed on August 23 but made public on Friday. CMA Phase 1 Investigationwhich stated that the authorities’ concerns about a significant reduction in competition were unfounded.
TMC also claimed that the CMA overstated TMC's combined market share, exaggerated the barriers to entry for new entrants, and “accepted without question the arguments of some suppliers that GBTs might slow down the development of NDCs, when in fact such arguments There is no basis for it.”
The 55-page written response, with many redacted sections, also argued that the TMCs are not currently each other's closest competitors, pointing instead to BCD Travel and acknowledging several competitors vying for global multinationals ( GMN) customer capabilities.
“The market for business travel services is highly competitive, with a number of strong competitors targeting clients of all sizes,” TMC wrote. The statement said the combined entity would “continue to face intense competition from at least four global competitors.” , noting that BCD Travel, FCM, CTM and Navan have “the credibility and track record to pursue and win contracts to service customers” at a variety of sizes with the most complex needs, as well as those with simpler needs. “
The statement added: “The decision [to escalate the investigation] Not taking into account the highly dynamic nature of the market”, “Customers are increasingly demanding digital solutions” and “Travel management companies provide global reach through technology solutions, travel partner networks and business process outsourcing solutions”.
TMC also believes that there is no separate market for global multinationals and SMEs with complex needs, arguing that companies of all sizes have “a continuum of needs that all TMCs can meet.”
According to the TMC, the CMA also relied too heavily on information published on BTN Business Travel 100 and Europe's leading TMC Report. “The decision relied on BTN's 2023 Corporate Travel 100 survey, which determined that 'only a handful of TMCs' were able to meet GMN's needs. However, the findings were largely US-centric and related solely to air volumes. … Therefore, the survey does not Not representative of the global geographic markets used in decision-making.”
The statement concluded: “The competitive assessment and conclusions of the decision are incorrect in a number of respects. The transaction will not result in BTA supplying SLC [business travel agency] To provide services to GMN customers or any other customers. “
It continued: “The evidence shows that business travel is a highly competitive, fragmented and dynamic market and the parties are not each other's closest competitors… The combined entity will be subject to more than five strong competitors and its post-transaction, Strong and sophisticated customers.”
The CMA will report its Phase 2 ruling by January 26, 2025, and the acquisition must also receive U.S. regulatory approval. Following confirmation of the second phase of the investigation in August, Amex GBT said it expected to complete the acquisition of CWT in the first quarter of 2025. First announced in MarchTMC said it hopes to complete the transaction in the second half of 2024.
Originally published by BTN Europe.
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