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American Express Global Business Travel has agreed a $570mn deal to buy rival CWT, in a bet on the continued recovery of business travel following the pandemic.
AmexGBT, which offers booking and management services for corporate travel, said the deal would add 4,000 new clients to its current tally of 20,000. Its existing customers include Google, Aon and Bank of America.
The acquisition comes at a time of growing competition and consolidation as the industry looks to move beyond the disruption of the pandemic.
The Global Business Travel Association last year forecast that corporate travel spending would recover to its pre-pandemic total of $1.4tn in 2024 and grow to nearly $1.8tn by 2027.
Paul Abbott, AmexGBT’s chief executive, told the Financial Times that he was bullish on the prospects for the business travel market, claiming it had a “massive runway for growth”.
But the recovery has been uneven, with many large airlines reporting a significant downturn in spending by corporate clients, even as hotels and events reliant on businesses have recovered more rapidly.
Abbott said the recovery had been led by small- and medium-sized companies, but that he expected more large corporates to catch up this year.
“I think what we’re going to see this year is a much more balanced picture. I think we’re going to see global multinational customers with healthy growth rates in a more stable growth environment,” he said.
Abbott added he expected consolidation to continue in a “very large, fragmented and growing industry”.
New York-listed AmexGBT bought booking platform Egencia from Expedia in 2021 in a deal valuing the business at $5.5bn, while rival TripActions, now called Navan, acquired UK-based specialist Reed & Mackay for more than $250mn in the same year.
AmexGBT was spun off into a joint venture in 2014 by American Express, and the company went public via a merger with a blank cheque company backed by Apollo Global Management in 2022.
The cash-and-stock deal for CWT is expected to close in the second half of the year, AmexGBT said.
Abbott said the industry needed to consolidate as clients were demanding increasingly sophisticated digital tools when managing their travel.
“The level of investment that is required to meet customer expectations going forward is significant, and a big part of those customer expectations are the best people, but also the best technology, the best software and services delivered consistently on a global basis,” he said.
Patrick Andersen, CWT’s chief executive, said: that “joining forces with AmexGBT helps accelerate our vision of a tech-enabled future for business travel”.
