Amex GBT has announced plans to acquire CWT for $570 million, which would create one of the largest corporate travel agencies in the world with revenue of between $3.28 billion to $3.35 billion. The acquisition is part of Amex GBT’s strategy to grow in an industry where many companies still book business travel manually. CWT’s client base includes industries such as energy, resources and marine, media, entertainment and sports, life sciences, and defense and government. Amex GBT sees this acquisition as an opportunity to drive share gains and growth both organically and inorganically.
About 35% of CWT’s business comes from small- and medium-sized companies, which will increase Amex GBT’s business in that area by about 35% and sales by about $5 billion. Additionally, CWT has a professional-services division for meetings and events as well as consulting services, which Amex GBT plans to leverage to grow its footprint in that area. The acquisition aligns with Amex GBT’s previous acquisitions of Hogg Robinson Group and Egencia, which led to a 24% increase in incremental revenue. The team is now focused on integrating CWT into its operations.
The combined entity is expected to achieve cost savings of about $155 million within three years, with about 35% of that amount expected in 2025. Improved efficiency from consolidation is expected to account for about 80% of the cost savings, with the rest related to vendor optimization. While the executives did not provide specific examples of where these efficiencies will come from, the savings are expected to drive growth in both companies. The team is committed to integrating CWT seamlessly into Amex GBT operations to maximize cost savings and operational efficiencies.
Both Amex GBT and CWT have been experimenting with integrating AI into their operations to drive efficiencies. Amex GBT is launching an internal AI initiative to strengthen its products, while CWT has already implemented AI-based customer service tools. The companies see AI and automation as significant opportunities for growth and operational improvement. By sharing best practices and technology, the combined company hopes to leverage AI to enhance customer service and drive operational efficiencies in various aspects of the business.
Despite being two of the largest travel agencies in the world, the acquisition of CWT by Amex GBT may face some regulatory challenges. However, Eric Bock, chief legal officer, expressed confidence that the transaction would close as planned. The team will be making regulatory filings in necessary jurisdictions, including the United States, to ensure compliance with regulations. While some big deals in other sectors of the travel industry have faced regulatory pushback in the past, Amex GBT is hopeful that the acquisition of CWT will be completed in the second half of the year.
Overall, the acquisition of CWT by Amex GBT represents a significant consolidation in the corporate travel industry, creating a single giant that is poised to drive growth, cost savings, and efficiencies. By expanding its client base, leveraging CWT’s expertise in professional services, and integrating AI technologies, the combined entity aims to enhance its offerings and capture a larger share of the business travel market. While potential regulatory challenges exist, the team is confident in the value of the acquisition and is committed to a smooth integration process to maximize synergies and drive long-term success.
