Skift Take
American Express Global Business Travel is making a shrewd, and expensive, move to become the world's biggest travel management company by a wide margin. More consolidation is almost certain to hit corporate travel as a result.
The corporate travel ecosystem soon will have a new juggernaut.
As reported last week, American Express Global Business Travel will acquire Hogg Robinson Group's travel management division, HRG, for up to $575 million (£411 million) American Express Global Business Travelin a cash transaction expected to close in the second quarter, pending shareholder and regulatory approval.
Hogg Robinson Group is selling off its financial technology and software-as-a-service division Fraedom to Visa for $198 million (£141.8 million), as well.
The financial documents defining the deal show the core win for American Express Global Business Travel will be increased scale worldwide. As business travel continues to grow, particularly in Europe and Asia-Pacific, competing on a global scale has taken on new importance.
Higher transaction volume means more commission payments from travel providers, and the combined company will have a sales volume close to online travel giants Priceline Group and Expedia Inc.
This larger scale also brings leverage in negotiations with the travel providers whose products it sells, allowing it to potentially offer cheaper airfares and room rates to its clients.
There is also, interestingly, the rationale that the acquisition will allow American Exp
