The acquisition of travel management company CWT by rival American Express Global Business Travel is being examined in more depth by the Competition and Markets Authority (CMA) in the United Kingdom.
Amex GBT announced its $570 million acquisition of CWT in late March, saying at the time it expected the deal to close in the second half of the year.
In a statement, the CMA has now said it is worried the merger could impact quality of service, pricing and/or “reduced innovation efforts for global multinational (GMN) business travel customers, as a result of combining the current largest and third-largest company operating in this market. Following the merger, there would be a very small pool of providers capable of catering to the business travel needs of GMN customers.”
The regulator has given the parties until August 6 to address its concerns or it will refer the merger to a more “in-depth Phase 2 investigation.”
Summarizing its initial inquiry, the regulator said it had sought feedback from other companies in the space and concluded that the merged company would be “the clear market leader and the CMA found that the loss of competition between the Parties would not be offset by the constraint posed by other suppliers in the market, including other traditional TMCs and more recent technology-driven entrants.”
Amex GBT said in June it had “voluntarily notified” the U.K. regulator of the acquisition for antitrust approval and said it was “working constructively with the CMA.”
PhocusWire has asked Amex GBT to comment.
