Amex GBT, CWT extend merger deadline, reduce valuation

American Express Global Business Travel will amend the existing terms of its acquisition of CWT.

The transaction value of the deal has been reduced from $570 million to $540 million and the ‘Drop Dead Date’ has been pushed back until December 31 2025, reports say.

This amendment is to give the parties more time to defend a civil antitrust lawsuit filed in January by the U.S. Department of Justice, which is seeking a permanent injunction to block the deal.

After studying the acquisition, the U.K Competitions and Markets Authority, earlier this month, supported the transaction, concluding that “CWT is a significantly weaker competitor than in the past and is likely to continue to weaken in the future and that there are other suppliers who will offer customers an alternative to the merged business.”

In a press release, Eric J. Bock, Amex GBT’s Chief Legal Officer and Global Head of M&A, said: “We are pleased to have reached an amended agreement with CWT and look forward to completing the transaction that will provide even more value and choice to customers and suppliers and more opportunities for CWT employees.

“We remain confident in the merits of our position in the lawsuit initiated by the DOJ and are prepared to prove this in court, if required. The reduction in the shares to be issued in this transaction reflects our continued belief in the value of our equity. With our strong and flexible balance sheet, coupled with our $300m share buyback program, we continue to create value for our shareholders.”

The amendments also see Amex GBT issuing around 50 million shares of its Class A common stock (down from 72 million shares) at the revised fixed stock price of $7.50 per share (up from the $6.00 per share initially agreed).

The rest of the acquisition will be funded using around $70 million of “cash on hand,” the same as originally agreed.

Closing of the transaction remains subject to conditions, including certain regulatory approvals.

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