Amex Global Business Travel (GBT) plans to acquire CWT for around $570 million, merging two of the largest corporate travel companies in the industry. Both companies are ranked among the world’s top travel agencies in terms of sales. The deal is expected to close in the second half of 2024 and will be funded by a combination of stock and cash. The combined entity aims to create efficiencies leading to savings of approximately $155 million within three years, with a significant portion expected in 2025. Amex GBT was spun out from American Express as a joint venture in 2014 and reported revenue of $2.3 billion in 2023, with narrowed losses of $136 million.
Founded in 1994, CWT is considered a legacy corporate travel company with a strong presence in the industry. It is expected to generate about $850 million in revenue in the current year, with adjusted earnings before interest, taxes, depreciation, and amortization ranging from $70-80 million. CWT has a substantial client base of 4,000 companies, who would benefit from access to Amex GBT’s products and services if the acquisition goes through. With 12,000 employees in 2022, CWT brings considerable manpower and expertise to the table, complementing Amex GBT’s existing workforce of 19,000 employees.
The acquisition of CWT by Amex GBT represents a significant move in the corporate travel sector, consolidating two major players in the industry. The deal is expected to bring together a wealth of resources, expertise, and client bases, creating a stronger and more competitive entity in the corporate travel market. By combining their strengths, both companies aim to streamline operations and generate cost savings, highlighting the potential for increased efficiency and profitability in the future. The acquisition is a strategic decision that reflects the changing landscape of the travel industry and the need for companies to adapt and evolve to remain competitive.
The financial details of the deal, with a purchase price of $570 million, funded by a combination of stock and cash, point to a significant investment by Amex GBT in acquiring CWT. The expected savings of approximately $155 million within three years demonstrate the potential synergies and efficiencies that can be achieved through the merger. These cost savings are crucial for both companies to improve their financial performance and strengthen their positions in the competitive corporate travel market. By leveraging their combined resources and capabilities, Amex GBT and CWT aim to enhance their offerings and provide a more comprehensive suite of services to their clients.
The acquisition of CWT by Amex GBT is part of a broader trend in the travel industry towards consolidation and strategic partnerships to drive growth and increase market share. By joining forces, both companies can leverage their respective strengths and capabilities to enhance their competitive position and better meet the evolving needs of corporate travelers. The deal underscores the importance of scale, efficiency, and innovation in the corporate travel sector, as companies continue to navigate the challenges and opportunities presented by the changing landscape of business travel. With the combined entity expected to be a major player in the industry, the acquisition of CWT by Amex GBT signals a new chapter in the evolution of corporate travel services.
Overall, the acquisition of CWT by Amex GBT represents a significant milestone in the corporate travel sector, with the potential to reshape the competitive landscape and drive innovation in the industry. By combining their strengths, resources, and client bases, both companies aim to create a more efficient and competitive entity that can better serve the needs of corporate travelers. The deal underscores the importance of strategic partnerships and consolidation in the travel industry, as companies seek to adapt to changing market dynamics and stay ahead of the competition. As the acquisition progresses and the two companies integrate their operations, the industry will be closely watching to see how this merger unfolds and impacts the future of corporate travel services.
