Executives at American Express Global Business Travel said Monday that the $570 million acquisition of rival CWT would bring significant shareholder value, add 4,000 new customers and generate immediate synergies.

If approved, the merger would be one of the largest in recent history for travel management companies: in 2018, Amex GBT acquired Hogg Robinson Group. Amex GBT expects the transaction to close in the second half of 2024.

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On a conference call with investors, Amex GBT CEO Paul Abbott said the company has identified about $155 million in annual synergies in the first three years.

“Our proven track record gives us confidence that we will achieve this goal,” he said, adding that Amex GBT expects the transaction to be “highly accretive,” breaking even in the first year and being accretive thereafter.

Karen Williams, Amex GBT’s chief financial officer, added that the acquisition is “an incredible story of synergies,” with the $155 million primarily being achieved by consolidating the cost base of CWT and Amex GBT. About 80% of this synergy target is related to improving efficiency through consolidation, she said, while the rest is expected from supplier optimization.

“It’s important to note that we expect AI and automation to represent a significant opportunity for us,” Williams said. “CWT is very much in line with this goal and offers several generative AI use cases within its CWT platform, highlighting the incredible leverage we have for margin expansion in the future.”

A GBT chart from American Express showing the expected synergies from the acquisition of CWT.

Abbott said the deal was part of Amex GBT’s focus on mergers and acquisitions (M&A). Abbott called the industry “vast and fragmented” with significant M&A opportunities.

“Our agreement with CWT clearly shows that we are seizing this attractive opportunity and delivering on our M&A priorities,” Abbott said, adding that Amex GBT’s first M&A priority is to “drive growth. This acquisition will allow us to immediately increase our revenue by a third, with the potential for even greater earnings growth over time.

CWT will add a diverse set of customers in terms of industry, geography and size, Abbott said, noting that the company has a “strong presence in high-value segments including energy, resources, marine, media, entertainment and sports, life sciences, defense and government.”

Abbott said customers will benefit from the deal.

“Creating more value for customers is really at the center of the transaction here,” he said. “And that comes in different forms, such as greater choice, including access to combined proprietary software solutions and combined professional services.

And saving customers money.

“We do this by giving them access to the most comprehensive and competitive content and creating the most valuable travel market,” said Abbott. “And it will certainly be a great benefit for CWT’s customers to have access to our marketplace and have access to the best and most comprehensive content in the industry.”

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