Paul Abbott, the CEO of American Express Global Business Travel, said the company hit a "key milestone" when the U.S. Department of Justice on July 29 dropped its lawsuit that sought to block the acquisition of CWT.
"We look forward to creating even more value for customers, suppliers and shareholders," Abbott said during Amex GBT's second-quarter earnings call Aug. 5.
The $540 million acquisition was announced in March 2024 (the transaction was originally set at $570 million but was reduced this past March). In January, the Biden administration's DOJ filed a lawsuit to block the transaction, on the grounds that it would stifle competition among the largest travel management companies that serve global and multinational clients.
But with the dismissal of the lawsuit on July 29, the path has been cleared for the acquisition, which is expected to close in the third quarter. It will marry two of the largest TMCs in the country. Amex GBT sits at No. 3 on Travel Weekly's Power List, with 2024 sales of $30.48 billion; only online travel giants Booking Holdings and Expedia Group are bigger.
CWT is No. 6 on the Power List with $15.2 billion in 2024 sales.
Two other global TMCs sit between them: BCD Travel and Flight Centre Travel Group. Just behind CWT is Chase Travel Group.
During its earnings call, Abbot said Amex GBT's "experienced team is ready for the integration, and we are confident in the growth opportunity of the combined company."
Abbott also called the deal a "compelling financial transaction" with around $155 million in net synergies.
Amex GBT has successfully integrated large acquisitions and hit synergy targets before, he added. It has acquired a number of major Power List agencies in recent years, including Hogg Robinson Group in 2018 and Egencia (then the corporate-travel arm of Expedia Group) and Ovation Travel Group in 2021.
Amex GBT exceeds Q2 expectations
While some data indicate a potential downturn coming in corporate travel, Amex GBT appears to be bucking the trend with a solid quarter.
The Global Business Travel Association in late July released data indicating corporate travel stakeholders were anticipating a slowdown. Among those surveyed, including corporate travel managers, suppliers and TMCs, optimism decreased from 67% in November 2024 to 28% by mid-June.
Respondents cited two main long-term concerns: higher travel costs and increased administrative burdens. U.S. government actions, like tariffs and entry restrictions, were also noted as impactful to business travel.
However, Amex GBT's financial results in the second quarter were better than expected, and the TMC raised its expectations of total revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the full year.
Abbott said macroeconomic uncertainty impacted the TMC in April. But, he said the impact "was temporary, and our transaction growth inflected back into positive territory, up 2%, in May and June combined."
"We continue to see green shoots into July that give us confidence that the demand environment has improved."
Certain segments of clients performed better than others, Abbott said. For instance, those in IT, pharmaceuticals, business, professional and financial services saw growth in May and June. However, those that were more affected by tariffs, like mining, oil, consumer goods and retail, "continued to see slower demand." The most impacted was the automotive industry, but its transaction growth improved in May and June.
Abbott said in a recent survey of GBT's top 100 customers, data pointed to a moderation of macroeconomic uncertainty. Customers are "seemingly less concerned or increasingly neutral on the impact of tariffs," he said. "We have seen little by way of tangible customer actions taken in terms of travel policy restrictions."
Amex GBT recorded a 1% revenue increase in Q2, to $631 million. Adjusted EBITDA was up 4%, to $133 million. Abbott said GBT hit a milestone with more than $500 million in adjusted EBITDA for the last 12 months.
Net income of $15 million was down 48%, mainly due to higher operating expenses, unfavorable foreign-exchange impacts and higher income taxes.