The U.S. Department of Justice has filed a civil antitrust lawsuit to stop Global Business Travel Group (Amex GBT), which it called the largest business travel management company in the world, from acquiring CWT Holdings, which it said is third largest. The complaint, filed in the U.S. District Court for the Southern District of New York, alleges that the proposed $570 million transaction — which would be Amex GBT’s fifth acquisition of another travel management company since 2018 — would harm competition for business travel management services to US global and multinational businesses.
Doha Mekki, acting assistant attorney general in the antitrust division, said the acquisition would 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. American businesses, he said, “will face the consequences, seeing higher prices, less innovation and fewer choices.”
According to the suit, CWT had recently begun pursuing new and innovative strategies to improve service and reduce prices in order to win over business from Amex GBT. As a result, Amex GBT recently lost several significant bid opportunities for large business customers to CWT. If Amex GBT is permitted to acquire CWT, said the suit, this intense competition would be lost, risking higher prices, less innovation and fewer choices — costs that will be borne by the many businesses and employees for whom these services are critical to their productivity and operations.
In a statement, Amex GBT said it is “disappointed” by the legal action, adding that it refutes the assertion that the transaction would harm large customers and that it believes the deal would benefit all customers, employees and suppliers.
“Rather than account for how the business travel industry looks today, the DOJ’s complaint takes a backward-looking view of the market and fails to recognize that the travel industry has transformed dramatically since the pandemic,” Amex GBT said. “Accordingly, the complaint presents a distorted view of the marketplace and attempts to support that view with factually incorrect statements and out-of-context snippets.”
The company argued that the complaint doesn’t account for the emergence of other competitors in the space in recent years. “The DOJ’s focus on only the largest and most powerful customers headquartered in the US that represent less than 3 percent of the global business travel market is unwarranted and unsupported by legal precedent,” Amex GBT said.
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