Skift Take
The joke goes that the only people who make money in mergers are the lawyers and the bankers. If litigation continues over Sabre's acquisition of Farelogix, the lawyers may be laughing all the way to the bank.
Sabre said this week that the U.S Department of Justice suit to block the company's acquisition of tech vendor Farelogix was "fatally flawed" and denied all of the allegations.
The lawsuit, which the Justice Department launched on Aug. 20, alleged the $360 million merger would give Sabre too much control in airline distribution technology.
Sabre's response provided a few tidbits of information about Farelogix. It only earned $7 million in the U.S. last year, out of $42 million in revenue worldwide.
The global distribution system provider said that only two of Farelogix's 15 customers are U.S.-based. However, Farelogix's website lists Alaska, American, Delta, United, and Hawaiian as customers. The company's lawyers must have been referring to customers of Farelogix's direct connect product. American Airlines is the largest U.S. user of that.
Sabre said the company's small revenue numbers equates to "a close to zero" market share in the U.S. But, like the department, it didn't offer a market definition.
The Justice Department said U.S. courts often measure market concentration with a particular type of calculation. Courts have found that mergers that increase this index of market concentration by more than 200 and result in a score above 2,500 out of 10,000 are anticompetitive.
The government's lawyers said they had analyzed the market "for booking services for airline tickets sold through traditional travel agencies in the United States." They alleged that the proposed acquisition would lead to a more than a 350 point increase in this index and give and Sabre a post-transaction score of more than 4,000 out of 10,000.
Sabre agreed that courts sometimes use that index. But it disputed the department's calculation.
The exchange of salvos came before Wednesday's decision by a U.S. appeals court that breathed new life into a separate, eight-year-old US Airways federal antitrust complaint against Sabre.
The U.S. Court of Appeals for the Second Circuit in New York opened up the possibility of a new trial on the allegation that Sabre's 2011 contract with the airline harmed competition. That case alleges Sabr
