Carlson Wagonlit Travel last week announced it would acquire Swedish travel management company Ark Travel for 273 million Swedish krona ($42.7 million). The deal would nearly double CWT's size in Sweden, where it has undergone a recent top management change and lost a key account that comprised nearly one-third of CWT's Swedish business.
The acquisition of the publicly held travel management company has been approved by the boards of both companies and is subject to approval by more than 90 percent of Ark's shareholders. The transaction is expected to close on Dec. 14. The Stockholm-based Ark Travel has offices in four additional cities and 140 employees.
The Ark Travel buy effectively doubles the size of CWT in Sweden, according to independent consultant Cathrine Lundberg, principal of Stockholm-based CMM Consulting, who estimates Ark's annual total travel volume to be less than $160 million, while CWT handles about $172 million. The Ark acquisition follows other recent moves by mega travel management companies in the region. In May, BCD Travel acquired Swedish TMC Travelflow
(BTN, June 11) and this summer the Ticket Travel Group, a leisure agency network that partners with FCm Travel Solutions, acquired MZ Travel.
American Express Business Travel, which was unavailable for comment before publication, is the dominant player in the $9 billion-plus Swedish travel market, according to Lundberg, who said the second-largest player is HRG, followed by the enlarged CWT.
Hans Holmen, head of HRG North Europe, said that although there still are some strong local players, such as Stockholm-based Radius partner VIA Travel, they are far behind the megas in managed volume and infrastructure. "Below the three is a big step down," he said.
HRG has a significant presence in the Nordic region with 850 employees through wholly owned operations in Denmark, Finland, Sweden and Norway, where it also has a 25-branch network, according to Holmen.
Carlson Wagonlit Travel would not comment on the acquisition, citing regulatory restrictions, but in a prepared statement, CWT executive vice president for north Europe Jan Willem Dekker said, "Ark Travel has successfully established itself as a reputable business travel management company. It shares with CWT a common client and quality focus. It represents a good fit with our external growth strategy."
According to Lundberg, "CWT had to do this because they lost one of their largest clients with the TeliaSonera account, the Swedish telecommunications company that made up 30 percent of their turnover. They were getting very small and were forced to do something in the market."
Along with the loss of the TeliaSonera account, CWT Sweden managing director Marika Sharvik left the company in the spring, according to Lundberg, who said Ark Travel managing director and group manager Susanna Bervå could be Sharvik's replacement.