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The UK’s competition watchdog has provisionally cleared a $570mn corporate travel deal in an unusual reversal of an earlier decision, as the regulator comes under government pressure to promote economic growth.
The Competition and Markets Authority on Tuesday said it had provisionally concluded that US-listed American Express Global Business Travel’s planned purchase of rival CWT would not result in a “substantial lessening of competition”.
The ruling represented a decisive change from November, when the regulator had issued an interim report that provisionally found that the merger was “likely” to lessen competition substantially.
The CMA said new evidence had since come to light that suggested CWT was in a weaker state than thought, and that there were “other suppliers” who would offer customers “an alternative to the merged business”.
The decision comes as the CMA is under huge pressure from the government to be more focused on growth and supportive of UK investment.
The watchdog has been in particular focus as Labour has sought to appeal to businesses that complain about the CMA being too interventionist in deals.
Frustration with the antitrust regulator led to the sudden ousting last month of chair Marcus Bokkerink. He was replaced by former Amazon UK boss Doug Gurr.
Gurr last week told the Financial Times he believed he could balance the pro-business mandate with its traditional role of protecting consumers from overpowerful companies.
The CMA has already said it will cut the timelines on merger consultations in a bid to help businesses move quicker on deals.
One competition lawyer said CMA’s change of heart on the Amex GBT deal was “very rare, if not unprecedented”.
The CMA in 2020 reversed a year-long block on Amazon’s investing in the UK food delivery service Deliveroo. In 2023, it changed course to clear Microsoft’s $75bn takeover of gaming company Activision, but only after the deal had been considerably reworked.
The Amex GBT deal is the first in-depth merger investigation that the CMA has conducted under a revised process known as “Phase 2”. This includes issuing provisional interim reports earlier in the regulatory process to allow companies involved to engage better with the regulator.
“Today’s supplementary report reflects the flexibility this new process provides,” said Martin Coleman, chair of the independent panel of experts conducting the investigation.
Paul Abbott, Amex GBT’s chief executive, said the deal would “accelerate investment and innovation in business travel, creating more choice and value for customers and suppliers, and more opportunities for CWT employees”.
Amex GBT is one of the biggest global participants in the market for booking and management services for corporate travel.
It was spun off into a joint venture in 2014 by American Express, the credit card provider. The company went public via a merger with a blank-cheque company backed by Apollo Global Management in 2022.
The CMA must make a final decision by March 9. The deal also faces a separate investigation by US antitrust authorities, which is ongoing.
Additional reporting by Suzi Ring in London
