Almost 12 months ago, American Express Global Business Travel revealed plans to buy rival agency CWT, in a deal worth $570 million.
It wasn’t a surprise to many, considering Amex GBT's acquisition track record in recent years.
But authorities on both sides of the Atlantic had other ideas. The United Kingdom’s Competition and Markets Authority (CMA) moved to block it in November 2024, with the United States Justice Department (DOJ) following suit in January 2025.
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The arguments centered on how a new, bigger entity would stifle competition and could lead to reduced choice and quality, as well as higher prices, for customers. A spokesperson for Amex GBT said no further comment is available since its last response earlier this year.
But when it comes to the merger and acquisition (M&A) landscape, technology and political issues appear to be playing more of a role in the decisions being made by authorities — and experts argue their impact will only intensify as artificial intelligence developments evolve at breakneck speed and a new wave of protectionism emerges.
Global dip
Last year was by no means an ordinary year. With elections taking place in more than 60 countries, and global political instability, there was a degree of nervousness in the travel industry.
During 2024, Phocuswright counted a total of 301 deals comprising mergers and acquisitions (M&A), private equity and venture financing across the nearly 8,000 travel industry companies it tracks in its Travel Startups Interactive Database — a year-on-year decrease of 44% compared to the previous year.
As well as its claimed anti-competitive nature, the Amex GBT and CWT deal hangs in the balance because of concerns over technology platform dominance. But one investor points out buying technology actually fuels many travel agency deals.
“You're seeing a lot of consolidation among the travel management companies because a lot of the mid-tier TMCs just can't keep pace with the advances they need to develop internally,” said Cara Whitehill, vice president at Thayer Investment Partners and founder of Unlock Advisors.
Notable deals in 2024 include TravelPerk’s acquisitions of AmTrav and Yokoy and Concur founder Steve Singh and a group of investors buying Direct Travel.
“They're also having to compete with the suppliers now that are kind of their partners in a lot of cases. That mid-tier TMC just really doesn't have a good way to compete,” Whitehill said.
So-called “acqui-hires” are common in the travel industry, as the CEO of Amadeus has highlighted, but regulators believe a combined Amex GBT and CWT platform would be a step too far. The DOJ said in its complaint: "Serving global and multinational customers requires significant scale in both technological and customer service capabilities that only a few TMCs possess today."
With this middle layer being “compressed,” according to Whitehill, lacking both internal talent to build generative artificial intelligence tools and the means to spend hundreds of thousands of dollars on AI engineers, she argued competition authorities would naturally prefer to shut down a merger of this scale.
And with such a deal happening, the future of CWT’s strategic partnership with Spotnana would be called into question. “That hamstrings a lot of the innovation that would otherwise be threatening to Amex GBT’s commercial model,” Whitehill said.
However, in terms of the wider marketplace, and the huge number of small and medium enterprises (SMEs) requiring travel services, overall she believes the mega-deal should be allowed. “There's enough business because they wouldn't necessarily compete for that business anyway,” she said.
Backward looking
While travel buyers at multinational companies would have one fewer global solution to turn to for their travel program if the deal did go ahead, the travel landscape is transforming.
For one U.S.-based investor, preferring to remain anonymous, blocking it doesn’t make sense. While it could slow down the pace of innovation in the industry, and limit choice for global multinationals, it would be a short-term impact only.
“The reality is that technology is changing at a rapid pace. The competitive advantages of having a scaled travel agent workforce is just decreasing over time,” they said, adding the DOJ’s view was “really backward looking.”
“More and more transactions are being enabled by self-service. This is causing the line between global multinationals and SMEs to blur,” they added. “If you fast forward five or ten years from now, the competitive landscape could look pretty different. Whether this deal goes through or not, those forces are already in place. It's going to be hard for the DOJ to stop that, and I think choice is going to be there.”
Strict regulatory environments
Acquisitions are equally curtailed due to ever tight regulatory environments. In Europe, regulators blocked Booking Holdings takeover of Sweden’s eTraveli Group because they said it would harm the market for online travel agencies. In September 2023, Booking said it would appeal the decision but little has been said since.
“The mega deal M&A activity — in particular the very visible ones — are perhaps at risk during 2025 and far from guaranteed,” said Morgann Lesné from travel M&A advisor and corporate finance specialist Cambon Partners. “This is particularly the case in Europe where the environment and regulatory challenges are tougher.” However, he points to $1.7 billion Despegar-Prosus deal. “We shouldn’t be too concerned yet,” he said.
Trump reboot
While concerns over less competition are valid, and have upended several high-profile deals such as Frontier and Spirit, would the situation be different today?
“The prior administration was perhaps more conservative in how it looked at M&A, and took a different view of implications on competition,” Whitehill said. “That's shifting considerably and we're going to see a lot more activity. A lot of money has been locked up in deals that have been waiting to have some kind of exit. As these deals start to flow through the system, it's going to unlock a lot of capital that's been tied up, and that in turn will be recycled into new startups.”
In January this year, Frontier renewed its bid to acquire Spirit.
Another factor with a “new” president in place is stability. “If buyers were on the fence on whether to pursue a deal, they're more likely to today than they were three months ago,” the U.S. investor added.”
The prior administration was perhaps more conservative in how it looked at M&A and took a different view of implications on competition. That's shifting considerably and we're going to see a lot more activity.
Cara Whitehill - Thayer Investment Partners
Since Trump’s arrival there have been a slew of chaotic executive orders issued, including tariff increases.
One deal under the first Trump administration that stumbled was Stayntouch’s proposed sale to China’s Shiji Information Technology. The government blocked it in 2020 over national security concerns.
“There's also this view that if you want to get a deal done, you have to get it done in the next couple of years, because you don't know what's gonna happen to the administration. There could be some urgency,” the investor said.
The future may also see bigger travel companies being forced to divest certain interests or divisions in order to make their next acquisition, to appease the lawmakers.
“There's a lot of conversation about Google,” Whitehill said. “Google can't acquire anybody because they're already so big. So they can't really acquire. It will be interesting to see if that approach takes hold in this newer administration where they're more willing to green light a deal, but it has to be carved up differently.”
As for Amex GBT and CWT, perhaps it’s a case of the right deal at the wrong time. After all, competition watchdogs, like the rest of the world, are playing catch up with technology trends.
A U.S. judge has set a trial date of September 8 following the DOJ's lawsuit to block the deal, while the U.K.’s CMA is expected to make its decision on March 9.