American Express Global Business Travel (AmexGBT) has sealed a $570 million deal to purchase rival CWT, signaling confidence in the ongoing recovery of business travel post-pandemic.
AmexGBT, a provider of booking and management services for corporate travel, anticipates adding 4,000 new clients to its existing base of 20,000. Notable clients include Google, Aon, and Bank of America.
The acquisition aligns with a trend of increased competition and consolidation in the industry as it navigates beyond pandemic disruptions.
The Global Business Travel Association projects a resurgence in corporate travel spending, expected to reach pre-pandemic levels of $1.4 trillion by 2024 and rise to nearly $1.8 trillion by 2027.
Paul Abbott, CEO of AmexGBT, expressed optimism about the business travel market's potential for substantial growth, citing a "massive runway for growth."
While recovery has been uneven, particularly with major airlines witnessing decreased corporate spending, Abbott foresees a more balanced landscape this year. He anticipates significant growth among large corporates.
The industry is experiencing ongoing consolidation within a large, fragmented, and expanding market.
AmexGBT's acquisition of Egencia from Expedia in 2021, valued at $5.5 billion, and rival TripActions' acquisition of Reed & Mackay for over $250 million reflect this consolidation trend.
AmexGBT, initially a joint venture by American Express in 2014, went public through a merger with an Apollo Global Management-backed blank cheque company in 2022.
The cash-and-stock acquisition of CWT is slated to finalize in the latter half of the year, according to AmexGBT.
Abbott emphasized the industry's need for consolidation to meet evolving client expectations, particularly in digital tools for travel management.
Patrick Andersen, CEO of CWT, noted that joining forces with AmexGBT accelerates their vision of a tech-enabled future for business travel.
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