American Express Global Business Travel and CWT have suggested a series of potential “remedies” to the UK’s Competition and Markets Authority (CMA), which could help them to gain clearance for their proposed merger, including price caps and service commitments for larger clients.
The proposed $570 million deal, which was announced in March, is currently undergoing an in-depth “phase two” investigation by the CMA.
Earlier this month, an interim report by the CMA found that the acquisition has the potential to “substantially lessen competition” and may lead to “reduced choice and quality, and higher prices” for global multinational (GMN) customers. Amex GBT has said that it “fundamentally disagrees” with the CMA’s interim findings.
The latest document, which was released by the CMA on Monday (25 November), details a “remedy proposal” from Amex GBT and CWT to potentially address the regulator’s competition concerns.
These remedies include opening up CWT’s partner network around the world for a “limited time”, which would give other TMCs “access to tenured and proven local TMCs in over 90 countries to partner with” when competing for contracts from GMN clients.
Another proposal would see “commitments on price and service offerings”, including price caps on current product and service fees, being given to all existing and renewing GMN customers of both TMCs for two years after the completion of the acquisition.
There would also be a commitment to continue investment in business travel services at Amex GBT’s current level of capital expenditure.
The two TMCs have further suggested the possible “divestment” to another TMC of “certain CWT GMN customer contracts with a substantial UK nexus”, if this was “considered necessary and proportionate” by the CMA.
“We have not yet reached any view on the effectiveness of the parties’ remedy proposal in addressing the provisional SLC (substantial lessening of competition) and resulting adverse effects,” said the CMA in its latest statement.
The CMA has now launched a one-week consultation process on Amex GBT-CWT's potential remedies. It has given “interested parties” until 2 December to submit comments. The regulator also has the power to block the deal completely.
The make-up of any final remedies sought by the regulator will “depend on the extent to which the preliminary concerns are upheld – if at all – in the final report”.
This final report is scheduled to be published in January, with the CMA’s decision on whether to permit the merger due by 26 January 2025.
Amex GBT declined to comment when approached by BTN Europe.