Amex GBT Acquires Competitor CWT in $570 million Deal

American Express Global Business Travel will acquire key rival CWT for $570 million after both businesses’ boards approve the agreement.

Amex GBT stated that the transaction would give CWT’s consumers “more choice and value” while also increasing “capacity for investment in software and services.”

Paul Abbott, Amex GBT’s CEO, said: “Bringing CWT onto the proven Amex GBT software and services model will create more choice for customers, more opportunities for people and more value for shareholders.”

The merger will bring two of the world’s largest travel management organizations together. CWT now has 4,000 customers, with an estimated total transaction value (TTV) of $14 billion and revenue of $850 million by 2024. Meanwhile, Amex GBT is expected to generate TTV of roughly $31 billion this year and revenue of $2.5 billion.

Amex GBT will fund its acquisition of CWT with a combination of shares and cash. It is expected to close in the second half of 2024, pending to regulatory and other approvals.

CWT CEO Patrick Andersen added: “Partnering with Amex GBT accelerates our vision of a tech-enabled future for business travel, where people and technology work together to provide an extraordinary customer experience. We are certain that the combined firm will create significant value.”

After the transaction, CWT clients will have access to Amex GBT’s platforms, including Neo1, Neo, and Egencia, according to the firms’ announcement.

The transaction continues the trend of consolidation in the worldwide TMC market. Amex GBT has been a prominent player in this process, having already acquired HRG in 2018 and Egencia from Expedia Group in 2021.

Amex GBT is the leading TMC in Europe, with projected gross European sales of €10.8 billion by 2022. In the same year, CWT had €3.8 billion in European sales, ranking third overall.

After filing for Chapter 11 bankruptcy protection in 2021, CWT’s current stockholders are “primarily” investment funds.

To fund its latest acquisition, Amex GBT announced that it would issue approximately 71.7 million additional shares at a fixed price of $6 per share. Additionally, it would “use cash on hand to fund the retirement of CWT debt and the remaining transaction consideration” .

CWT stockholders will own approximately 13% of Amex GBT, which has been listed on the New York Stock Exchange since May 2022, once the transaction is finalized.

Amex GBT noted that it has discovered approximately $155 million in yearly “synergies” or cost cuts over the next three years following the CWT acquisition.

Abbott described the CWT transaction as a “unique opportunity to significantly grow our business” during a conference call on Monday (March 25).

It is uncertain whether the CWT brand will be kept following the acquisition.

Amex GBT’s VP of public affairs, Martin Ferguson, stated to BTN Europe that nothing will change for now. It is business as usual. Plans for the future will be determined during the integration process.”

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