The Justice Department is considering a lawsuit to block a major travel industry merger as the Biden Administration nears its final days, according to a new report from Bloomberg.
Key Facts:
• American Express Global Business Travel (Amex GBT) wants to acquire rival CWT Holdings for about $570 million.
• The lawsuit, if filed, could happen this week, although no final decision has been made.
• The companies met with senior DOJ officials recently to defend the deal.
• The UK’s Competition and Markets Authority is also evaluating the merger and could decide by late January.
• Amex GBT ranks third among the world’s largest travel companies and focuses on corporate clients.
The Rest of The Story:
In March 2024, Amex GBT announced plans to buy CWT, a move that would combine two major travel management firms under one umbrella.
American Express itself holds only a minority interest in Amex GBT, which was spun off in 2014.
CWT, meanwhile, is largely owned by investment groups.
Regulators argue that combining these giants could reduce healthy market competition.
In addition to U.S. authorities, the UK’s watchdog is examining whether the acquisition would limit choices for large corporate clients.
To ease concerns, the companies have offered measures such as price caps and opening CWT’s network to other travel providers.
There's something appealing about a business model that makes money by saving other people money. So why is Amex GBT, the largest corporate travel management company, losing money? https://t.co/G5Pbbqqt22
— Skift (@skift) November 6, 2024
Commentary:
We believe the Justice Department and other agencies should hold off on any new enforcement moves until the next administration takes office.
Launching such cases without the incoming team’s input adds unnecessary confusion, costs, and administrative work.
It’s better to let the new leadership set policy before final decisions are made.
Waiting allows for a more stable environment and avoids burdens on both the government and businesses, who will need to adapt to shifting rules under fresh leadership.
The Bottom Line:
This potential DOJ challenge could shake up the corporate travel market.
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The final outcome hinges on ongoing reviews and the stance of the next administration.