American Express Global Business Travel has announced the acquisition of major competitor CWT in a deal valued at $570 million, following approval from both companies’ boards.
Amex GBT stated that the acquisition will offer CWT customers “increased choice and value,” as well as enabling “greater investment in software and services.” Paul Abbott, CEO of Amex GBT, expressed that integrating CWT into their software and services model will benefit customers, employees, and shareholders.
The merger will bring together two of the largest travel management companies, with CWT currently serving 4,000 customers with an estimated total transaction value of $14 billion and revenue of $850 million by 2024. On the other hand, Amex GBT is projected to achieve a total transaction value of around $31 billion and revenue of $2.5 billion this year.
The acquisition of CWT by Amex GBT will be financed through a combination of shares and cash, with the expected closing date in the second half of 2024, subject to regulatory approvals.
CWT’s CEO Patrick Andersen expressed optimism about the partnership with Amex GBT, emphasizing a tech-enabled future for business travel and highlighting the value creation of the combined companies.
Following the completion of the deal, CWT customers will have access to Amex GBT’s platforms such as Neo1, Neo, and Egencia, according to a joint statement from the companies.
This acquisition is part of a broader trend of consolidation in the global TMC sector, with Amex GBT leading the way through its previous acquisitions of HRG in 2018 and Egencia in 2021.
Amex GBT is currently ranked as the top TMC in Europe, with estimated gross European sales of €10.8 billion in 2022, while CWT ranks third with European sales of €3.8 billion in the same year.
CWT’s shareholders are mainly investment funds following a Chapter 11 bankruptcy protection process in 2021. Amex GBT plans to issue new shares and utilize cash to fund the acquisition.
After the completion of the deal, CWT shareholders will hold approximately 13% of Amex GBT. Annual synergies of around $155 million are expected within three years following the acquisition of CWT.
Abbott described the CWT deal as an opportunity for significant business growth during a conference call. The future of the CWT brand post-acquisition remains unclear at this time.
Martin Ferguson, Amex GBT’s VP of public affairs, assured that there will be no immediate changes and that plans for the future will be developed during the integration process.
