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.
Notes to editors
- The deal is also under review by the Department of Justice in
the United States.
- 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.
