A deal that was perhaps unlikely just 12 months ago: American Express Global Business Travel is to buy Expedia Group's corporate travel division Egencia.
Terms of the agreement have not been disclosed.
Expedia Group will become a shareholder in Amex GBT and part of the agreement will see the pair enter a long-term strategic partnership.
The proposed deal is subject to consultation by Expedia Group and Egencia with employee representatives, as well as customary closing conditions, including regulatory approvals.
Amex GBT says it will "continue to invest in the Egencia brand, its people and technology, as part of the world’s leading business travel platform."
Amex GBT CEO Paul Abbott says: "Our strategy is to provide customers with unparalleled choice by having the best solutions for each managed travel segment that we serve. In Egencia, we would welcome the industry’s leading digital business travel platform.
He adds that it's also the "proven global digital travel management platform."
“Egencia would be strengthened by GBT’s complementary technology, enterprise capabilities and cutting-edge content. This would create new opportunities for both multinational and small and medium-sized enterprise (SME) clients, suppliers and the talented teams within both organizations."
The deal comes amid ongoing interest in financial backing the new breed of corporate travel management startups, such as TripActions and TravelPerk.
The pair recently announced $155 million and $166 million investment rounds, respectively.
It also comes at a time of increasing consolidation in the corporate travel management segment with TravelPerk acquiring NexTravel in January and TripActions' acquisition of Reed & Mackay announced this week.
Abbott says he doesn't think of the proposed Egencia acquisition as industry consolidation.
"Some transactions are because of the current environment and are because demand is reduced and that is creating pressure on some companies' balance sheets and that is driving consolidation. To be very that is absolutely not the situation here, we’re talking about American Express GBT and Expedia so this is a strategic transaction. It’s us executing on a strategic plan we put together 18 months ago before the pandemic."
Egencia was considered the smaller of the major travel management companies alongside Amex GBT, BCD Travel and CWT.
It was created as a unit within Expedia in 2004, before renaming to Egencia in 2008 following the acquisition of a venture capital-backed business travel startup in France of the same name.
Acquisitions of its own came in 2011 and 2012 with deals to buy Traveldoo and VIA Travel, respectively.
Abbott says "the sweetspot for Egencia is the middle market."
"That's a segment we’re keen to grow and keen to incraese our presence in. We see lot of growth coming from SME segment, it's the fastest growing segment in business travel. We also see it as segment recovering quicker from the pandemic, and we believe there’s a tailwind in this segment in terms of movement from unmanaged to managed travel."
Ariane Gorin, president of Expedia Business Services, says: "We are thrilled by the potential transaction and what GBT and Egencia could achieve together, as Expedia Group seeks to simplify our business and be a leader in all of our endeavours. The combination of GBT’s leading solutions with Egencia’s great technology and team would help create the world’s best business travel offerings for customers and suppliers.
“At the same time, a greatly expanded, long-term accommodations supply agreement with Expedia Partner Solutions (EPS) would enhance GBT’s Supply MarketPlace and meaningfully further Expedia Group’s goal of powering businesses across the entire eco-system."
U.S. Corporate Travel Report 2020-2024
Based on a combination of executive interviews, a survey of travel managers and a comprehensive market sizing exercise, this Phocuswright travel research report explores the state of the U.S. corporate travel market, including sizing and projections through 2024.