An independent inquiry has found that the proposed merger between two of the three largest corporate travel management companies, Global Business Travel Group and CWT Holdings, has the potential to ‘substantially lessen’ competition.
The Competition and Markets Authority (CMA) found that the merged company would be the clear market leader, and that the loss of competition between GBT and CWT as a result of the merger would not be offset by competition from other suppliers in the market.
It found this could lead to reduced choice and quality, and higher prices for customers.
The merged business would be, by far, the largest supplier in the market, said the CMA, with the second largest player around half the size of the merged business, and the remaining competitors ‘less credible options’ for customers.
Martin Coleman, Chair of the independent inquiry group assessing the deal, said: “Despite the increased use of video conferencing, business travel continues to be a necessary component for effectively doing business for many companies and a major area of expenditure.
“Business travel also plays an important role in the UK economy, facilitating global trade, supply chains, knowledge exchange and international investment. A cost-effective, good quality and efficient business travel sector is therefore an important underpinning element of UK productivity and economic growth.
“We have provisionally found that only a small number of business travel agencies are considered capable of meeting the needs of the largest companies and this deal could reduce competition and increase costs.
“We now look forward to engaging further with the companies on our provisional decision, including meetings with the businesspeople.”
The CMA invites any interested parties to respond to these provisional findings by no later than 27 November 2024.
The merger is also under review by the Department of Justice in the US.
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The Competition and Markets Authority (CMA) found that the merged company would be the clear market leader, and that the loss of competition between GBT and CWT as a result of the merger would not be offset by competition from other suppliers in the market.
It found this could lead to reduced choice and quality, and higher prices for customers.
The merged business would be, by far, the largest supplier in the market, said the CMA, with the second largest player around half the size of the merged business, and the remaining competitors ‘less credible options’ for customers.
Martin Coleman, Chair of the independent inquiry group assessing the deal, said: “Despite the increased use of video conferencing, business travel continues to be a necessary component for effectively doing business for many companies and a major area of expenditure.
“Business travel also plays an important role in the UK economy, facilitating global trade, supply chains, knowledge exchange and international investment. A cost-effective, good quality and efficient business travel sector is therefore an important underpinning element of UK productivity and economic growth.
“We have provisionally found that only a small number of business travel agencies are considered capable of meeting the needs of the largest companies and this deal could reduce competition and increase costs.
“We now look forward to engaging further with the companies on our provisional decision, including meetings with the businesspeople.”
The CMA invites any interested parties to respond to these provisional findings by no later than 27 November 2024.
The merger is also under review by the Department of Justice in the US.
The post TMC merger could lead to higher prices, warns independent inquiry appeared first on Travel Gossip.
Continue reading...
