One obstacle to American Express Global Business Travel's acquisition of CWT appears to be clearing, as the U.K. Competition and Markets Authority has reversed its position that the merger would weaken competition.
In a supplementary interim report of its investigation of the $570 million mega-TMC merger published on Tuesday, the CMA said its further analysis and review of evidence submitted by Amex GBT and CWT show that CWT is "a materially weaker competitor" than it had previously assessed, citing its "financial difficulties" and that "its financial position is unlikely to improve, and it potentially faces a trajectory of losing more business than it will gain." The CMA also found that FCM was a stronger competitor than it previously thought and that it and Navan, along with BCD Travel, would continue to be strong competitors for large corporate travel programs.
"Having considered all the evidence in the round, particularly the further analysis of CWT's financial position, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in corporate travel management services," Martin Coleman, the chair of the independent panel investigating the merger, said in a statement.
The investigating panel was not unanimous in that decision, as the report noted that two members had changed their mind while the other two continued to agree with the previous findings that the merger would substantially lessen competition. However, the process requires a two-thirds majority from the panel to reach that determination, according to the report.
The report also said the Amex GBT and CWT would not need to proceed with their offered remedies for the merger should the final decision be that the merger does not substantially lessen competition. Proposed remedies by the TMCs had included price caps, divesting customers and opening CWT's travel partner network to work with other TMCs.
The CMA is accepting feedback on its report through Tuesday, Feb. 25, and it will make a final decision by March 9, according to the authority. In a statement, Amex GBT chief legal officer and global head of M&A Eric Bock in a statement said the new report "is an important milestone toward the consummation of the transaction."
The merger still faces a civil antitrust lawsuit filed by the U.S. Justice Department earlier this year, in the final days of the Biden administration, which alleged the merger would harm competition for U.S. global and multinational businesses' corporate travel management services. That lawsuit currently has a trial date of Sept. 8, and Amex GBT and CWT so far have been unsuccessful in their attempts to speed up the process, as reported by BTN sister publication The Beat.
In his statement, Bock said the CMA's newly published findings "reinforce the company’s belief that the DOJ’s lawsuit is fundamentally flawed, taking a narrow and outdated view of competition and disregarding the emergence of numerous significant competitors in business travel."
To date, Amex GBT has not issued an updated timeline on when it expects to close the merger, as it originally planned to do so in the first quarter of this year. Amex GBT will report its fourth-quarter earnings next week.