REG - Competition and Mkts - Merger Update - GBT / CWT

Global Business TravelAnnouncement

06/11/2024 15:15

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RNS Number : 2045L  Competition and Markets Authority  06 November 2024

CMA publishes interim report in corporate travel merger

CMA's first interim report under its new phase 2 mergers process has
provisionally found competition concerns over GBT's planned acquisition of
CWT.

An independent Competition and Markets Authority (CMA) inquiry group has
provisionally found the proposed merger between two of the three largest
corporate travel management companies, Global Business Travel Group (GBT) and
CWT Holdings LLC (CWT) has the potential to substantially lessen competition.

Both companies supply travel agency services to global businesses with high
travel spend and employees who travel internationally.  GBT and CWT's
customers include UK headquartered business and international businesses with
significant operations in the UK.

The independent group provisionally found that the merged company would be the
clear market leader, and that the loss of competition between GBT and CWT as a
result of the merger would not be offset by competition from other suppliers
in the market, which could lead to reduced choice and quality, and higher
prices for the customers.

The evidence assessed by the Group, including share of supply estimates,
bidding data, the companies' internal documents, as well as information from
customers and competitors, showed that GBT and CWT compete closely for global
multinational customers, largely because of their scale and global coverage.
As a result, the merged business would be, by far, the largest supplier in the
market, with the second largest player around half the size of the merged
business, and the remaining competitors less credible options for customers.

This investigation is the first conducted under the CMA's revised process for
phase 2 merger investigations. The new process is designed to enable more, and
earlier, opportunities for the merging companies and other businesses affected
by a merger to engage with the inquiry group overseeing the investigation, as
well as streamlining aspects of the investigation to the benefit of all
stakeholders.

Martin Coleman, chair of the independent inquiry group assessing the deal,
said:

"Despite the increased use of video conferencing, business travel continues to
be a necessary component for effectively doing business for many companies and
a major area of expenditure. Business travel also plays an important role in
the UK economy, facilitating global trade, supply chains, knowledge exchange
and international investment. A cost-effective, good quality and efficient
business travel sector is therefore an important underpinning element of UK
productivity and economic growth.

"We have provisionally found that only a small number of business travel
agencies are considered capable of meeting the needs of the largest companies
and this deal could reduce competition and increase costs."

On the new phase 2 process, Martin Coleman said:

"We know businesses have been keenly awaiting our incoming changes, which are
designed to deliver a timely step change in aspects of the way the regime
works. The effectiveness of our new process is evidenced by the additional and
more open engagement we have had with the companies, and other businesses
affected by this deal. This has also allowed us to make our provisional
decision earlier than under the old process.

"We now look forward to engaging further with the companies on our provisional
decision, including meetings with the businesspeople."

The CMA invites any interested parties to respond to these provisional
findings by no later than 27 November 2024.

More information can be found on the GBT / CWT case page
(https://www.gov.uk/cma-cases/global-business-travel-group-inc-slash-cwt-holdings-llc-merger-inquiry)
.

Notes to editors

1.   The deal is also under review by the Department of Justice in the
United States.

2.   New Phase 1 cases opened by the CMA after 25 April 2024 which are
referred for an in-depth Phase 2 investigation are run under the new Phase 2
process
(https://www.gov.uk/government/news/new-phase-2-investigation-process-adopted-by-cma)
.

3.   All media enquiries should be directed to the CMA press office by email
on press@cma.gov.uk (mailto:press@cma.gov.uk) , or by phone on 020 3738 6460.

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