Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Justice Department sues to block American Express Global Business Travel Group Inc. from acquiring CWT Holdings, (Jan 10, 2025)

By Donielle Tigay Stutland, J.D.

DOJ seeks to enjoin the world’s largest travel management company, Global Business Travel Group, Inc. from paying $570 million to acquire its second largest competitor.

The US Department of Justice announced the filing of a complaint in federal court in New York City to block the proposed $570 million merger between corporate travel agencies American Express Global Business Travel (Amex GBT) and CWT Holdings, LLC (CWT). The two companies both specialize in managing corporate travel and event planning for large businesses. DOJ’s complaint urges the court that: "Amex GBT’s proposed acquisition of CWT threatens to substantially lessen competition and harm customers of business travel management services in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. Accordingly, it should be enjoined.” DOJ’s complaint also argues that, “If completed, this deal would extinguish fierce head-to-head competition between Amex GBT and CWT and risk higher prices, fewer choices, and less innovation, thereby threatening harm to scores of businesses crucial to the U.S. economy” (U.S. v. Global Business Travel Group Inc., No. 1:25-cv-00215, (S.D.N.Y. Jan. 10, 2025)).

“American businesses rely on travel management companies to connect employees, control travel costs, make travel booking and expense management easier, and ensure their employees’ safety during travel,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “This acquisition is the latest in a series of acquisitions by Amex GBT that will further consolidate an already consolidated market with only a handful of competitive options capable of serving customers with the most need for travel management services. American businesses will face the consequences, seeing higher prices, less innovation and fewer choices.”

Companies. The complaint indicates that Amex GBT is the largest provider of business travel management services in the world and in 2023, it managed approximately $28 billion worth of business travel transactions. DOJ also alleges that CWT is the third-largest provider of business travel management services in the world, and in 2024, CWT expects to manage approximately $14 billion in business travel transactions.

Relevant markets. The complaint lays out the relevant product market as business travel management services sold to global and multinational customers and indicates that it is a relevant line of commerce and relevant product market in which to assess the threat to competition posed by this deal. The relevant geographic market for analyzing the competitive effects of the proposed acquisition is the United States.

Harm to competition. The complaint asserts that Amex GBT’s proposed acquisition of its competitor, CWT, may substantially lessen competition or tend to create a monopoly in the sale of business travel management services to U.S. global and multinational customers. DOJ also asserts that “Because the proposed acquisition would substantially increase Amex GBT’s market share and overall market concentration in the relevant market, it is presumed to be illegal.”

In the relevant market, the combined firm’s share would be well in excess of 30%. Additionally, the proposed acquisition is alleged to “make this already highly concentrated market even more concentrated,” with a post-merger Herfindahl Hirschman Index (“HHI”) substantially higher than 1,800 and market concentration increasing by far more than the 100 HHI-increase necessary to trigger the presumption.

DOJ’s complaint also noted that in negotiations for the deal, CWT’s owners estimated that the transaction would potentially allow Amex GBT to charge travel suppliers more than $100 million in increased commissions and fees, and the negotiations “pressed Amex GBT to improve its offer for CWT to reflect those additional revenues.”

In addition to corporate customers, the complaint highlights that airlines, hotels, and other travel suppliers would suffer as well if this acquisition were allowed to proceed. The complaint also suggests that the “proposed acquisition would also slow technology innovation for business travel management services that would otherwise benefit American businesses.”

Companies: American Express Global Business Travel; CWT Holdings, LLC

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