American Express Global Business Travel has criticised the US Justice Department’s antitrust lawsuit to block its acquisition of CWT as a “blatant politicised effort to bring one final anti-business merger challenge” in the final days of the Biden administration.
In its response filed on Tuesday to the DOJ’s complaint filed last week, Amex GBT characterised the DOJ’s findings “a rushed, apparently politically motivated complaint” given the acquisition was slated to close in March, at which time the Trump administration will be in charge.
The TMC also said the complaint “presents a completely inaccurate picture of the current industry using cherry-picked facts, isolated examples, and stale, out-of-context statements that do not reflect today’s competitive landscape.”
The $570 million acquisition also is facing a challenge from the UK Competition and Market Authority, with a final decision expected within the next two weeks.
Similar to the CMA’s findings, the DOJ claims there is a limited number of agencies that are capable of meeting the needs of clients in the global and multinational segment. However, Amex GBT said the DOJ’s complaint “gerrymanders a contrived market” of global multinational companies without “showing that these customers receive unique products or services or even have similar purchasing patterns or demands.” Additionally, it said that “at least six TMCs meet the requirements of large customers as frequently as CWT.”
Amex GBT also refuted claims of creating limited technology choice and forcing clients to migrate to its own platforms (Egencia and Neo) by stating it would continue to support third-party technology.
Hitting back at additional DOJ claims that the TMC has “repeatedly dragged its feet in adopting New Distribution Capability standards,” compared with CWT, Amex GBT said it has made “extensive efforts” to drive NDC adoption, with an NDC program that now includes 16 countries and 20 airlines.
Concerns over increased commissions and fees were also raised in the DOJ filing. “During negotiations, CWT’s owners estimated that the transaction would potentially allow Amex GBT to charge travel suppliers more than $100 million in increased commissions and fees, and they pressed Amex GBT to improve its offer for CWT to reflect those additional revenues,” according to the complaint. The DOJ added that Amex GBT had been successful in renegotiating higher fees following its acquisition of Egencia.
In response, Amex GBT said the above estimate reflects “an ineffective negotiation tactic from CWT owners in negotiating the proposed transaction. In determining the valuation of CWT, Amex GBT never underwrote any supplier harmonisation synergies.”
A more in-depth version of this article was first published yesterday on businesstravelnews.com.