American Express Global Business Travel has submitted a remedy proposal to address concerns by the U.K.'s Competition and Markets Authority regarding its proposed merger with CWT, including price caps, divesting customers and opening CWT's travel partner network.
The remedies, of which the CMA published a summary on Monday, address the regulatory authority's preliminary finding earlier this month that the $570 million acquisition of CWT by Amex GBT could "substantially lessen competition." The CMA is taking comments on the proposed remedies through Dec. 2.
Among Amex GBT's proposals is "to open up CWT's entire travel partner network post-transaction," according to the CMA's summary. That would give competing travel management companies access to work with local TMCs across 90 countries that currently are exclusive to CWT.
Amex GBT also included "customer commitments" on pricing, service and investment in its proposal. Amex GBT said it would cap current product and service fees in existing contracts for large global clients for a two-year period following the closing of the acquisition "provided there is no material change to the scope of products and services requested by such customers." The TMC said it pledged not to "decrease current contractual service level obligations" in that same period and committed to continued investment to develop and improve the merged company's offering "at levels no less than GBT's pre-transaction capex spend" for that period.
Additionally, Amex GBT said it would be willing to divest some of CWT's large global clients with substantial business in the U.K. to another TMC "if the CMA considers it necessary and appropriate." That would "provide immediate scale to a competing TMC," according to the summary.
The CMA said it currently is considering those remedies along with the possibility of blocking the merger altogether.
"Prohibition of the merger would prevent the provisional [substantial lessening of competition] from arising," the CMA said in the summary. "We therefore take the initial view that full prohibition of the merger would represent a comprehensive solution to all aspects of the provisional SLC we have provisionally found, and consequently any resulting adverse effects, and that the risks in terms of its effectiveness are very low."
For the commenting period over the next week, the CMA said it is seeking views on whether Amex GBT's proposed remedy addresses the "adverse effects" it identified in the preliminary report. It also will consider additional remedies proposed either by Amex GBT and CWT or "any interested third parties."
Amex GBT earlier this month said it continues to expect that it will close the acquisition of CWT in the first quarter of 2025.