Justice Department Takes Action: A Bold Lawsuit Against Global Business Travel Group’s CWT Holdings Merger Plans

The Justice Department has initiated a civil antitrust litigation today aimed at preventing Global Business Travel Group Inc. (Amex GBT), the largest firm in the business travel management sector worldwide, from purchasing its competitor, CWT Holdings LLC (CWT), the third-largest company in this industry. The lawsuit, lodged today in the U.S. District Court for the Southern District of New York, claims that the proposed $570 million deal — Amex GBT’s fifth acquisition since 2018 — would negatively impact competition regarding business travel management services for U.S. multinational and global corporations.

“U.S. firms depend on travel management companies to connect staff, manage travel expenses, streamline travel booking and expense management, and guarantee the safety of employees during their travels,” stated Acting Assistant Attorney General Doha Mekki from the Justice Department’s Antitrust Division. “This acquisition represents the latest in a series of purchases by Amex GBT that would further tighten an already concentrated market, with only a few competitive alternatives available to serve customers with the greatest need for travel management services. American enterprises will suffer the repercussions, facing elevated costs, diminished innovation, and reduced choices.”

As stated in the lawsuit, Amex GBT and CWT perceived that the proposed consolidation would damage competition and benefit the merged entity to the detriment of its clientele. The lawsuit asserts that leading executives at Amex GBT considered the acquisition as a chance for “consolidation” in the market for business travel management services meant for multinational and global customers, and as a means to recuperate from recent client losses to CWT. Furthermore, it claims that Amex GBT understood that its assessment of the acquisition’s value should take into account the financial advantages of averting future business losses to CWT. For instance, its CEO communicated to its president that the organization “need[ed] to evaluate how much we might lose to [CWT] annually in a [business as usual] scenario.” During negotiations, CWT’s owners similarly believed Amex GBT should provide a higher price for CWT in acknowledgment of the increased earnings that Amex GBT would reap post-merger due to the reduction in “price pressure” from “eliminating [a] major competitor.”

The lawsuit contends that the merger of Amex GBT and CWT would merge two of the three largest entities in providing business travel management services for U.S. global and multinational corporations, granting the resulting firm a substantial share in a market recognized by CWT as “oligopolistic.” Few other firms possess the capability to effectively deliver travel management services to global and multinational companies in the U.S. at the scale of Amex GBT and CWT.

Currently, Amex GBT and CWT are vigorously competing to deliver travel management services to major corporations, as well as those with intricate travel requirements. CWT had recently commenced employing fresh and innovative approaches to enhance service and cut costs to attract business away from Amex GBT. Consequently, Amex GBT has recently forfeited several important bidding opportunities for major business clients to CWT. Should Amex GBT be allowed to acquire CWT, this fierce competition would vanish, leading to greater costs, a decline in innovation, and fewer alternatives — burdens that will be borne by the numerous businesses and employees for whom these services are essential for productivity and operations.

Amex GBT is a publicly traded corporation registered in Delaware, with its main executive office situated in New York City and its operational headquarters in London. In 2023, Amex GBT facilitated a total transaction value of around $28.2 billion, generating revenues of $2.29 billion.

CWT is a privately owned entity based in Minnetonka, Minnesota. In 2023, CWT managed an overall transaction volume of approximately $14 billion, yielding revenues close to $850 million.