U.S. Justice Department sues to block Amex GBT-CWT deal

The U.S. Justice Department (DOJ) has filed a civil antitrust lawsuit to block American Express Global Business Travel (Amex GBT) from completing its proposed $570 million transaction to buy CWT Holdings (CWT).

The suit has been filed in the U.S. District Court for the Southern District of New York, report says. It alleges that the transaction would harm competition for corporate travel management services for U.S. global and multinational businesses.

“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, in a statement.

“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.”

The complaint alleges that senior Amex GBT executives viewed the acquisition as an opportunity for “consolidation” of the market for business travel management services for global and multinational customers and a respite from its recent customer losses to CWT.

The complaint further alleges that Amex GBT recognized that its valuation of the proposed acquisition should reflect the financial benefit of avoiding future loss business to CWT.

The complaint also alleges that the combination of Amex GBT and CWT would combine two of the three largest players in business travel management services for global and multinational companies located in the United States, giving the combined firm a significant share in a market.

Today, Amex GBT and CWT compete to provide travel management services for large businesses and those with complex travel needs.

CWT had recently begun pursuing new and innovative strategies to improve service and reduce prices in order to win over business from Amex GBT.

As a result, Amex GBT recently lost several significant bid opportunities for large business customers to CWT.

“If Amex GBT is permitted to acquire CWT, this intense competition would be lost, risking higher prices, less innovation and fewer choices — costs that will be borne by the many businesses and employees for whom these services are critical to their productivity and operations,” the DOJ said in a statement.

The DOJ's complaint comes in the final days of the Biden administration, and in less than two weeks, it will handed over to the incoming Trump administration, which some believe will take a more hands-off approach to challenging mergers and acquisitions.

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