by Michael J. Shapiro | February 09, 2018
Two of the world's biggest travel-management companies will merge, as American Express Global Business Travel has announced it will acquire U.K.-based rival Hogg Robinson Group, commonly known as HRG. The all-cash deal will be valued between approximately US$519 million and US$566 million. The final price will depend on how quickly a separate Hogg Robinson deal is finalized, concerning a previous agreement to sell its Fraedom SaaS tech unit to Visa.
Once the Amex acquisition receives antitrust and other regulatory approvals, it should close in the second quarter of 2018.
"The complementary geographical footprints of each company will improve the global scale and reach of our business, enabling us to achieve efficiencies across a best-in-class platform and accelerate growth. " said Amex GBT CEO Doug Anderson. "The technology roadmaps of each business provide a powerful platform from which to drive future innovation. We will deliver a superior client and traveler experience through fully integrated travel-management solutions, including booking and expense-management products."
When Amex spun off its Global Business Travel unit as a joint venture in 2014, one of the motivations was to create an investment platform for new travel-tech solutions. This acquisition would be in line with that goal, growing the company while streamlining tech across a broader client base. One of the stated goals of this new deal is to "combine two advanced travel-technology and -development platforms to create better products and services to serve clients and travelers."
Additional benefits will be realized via cost savings and scaled benefits, and greater efficiencies that come from the joint management of both businesses.
"The board of directors of GBT strongly endorses the acquisition of Hogg Robinson," added chairman of the board Greg O'Hara. "Significant customer, operational and financial benefits are expected. I am excited at the prospect of creating a truly world-class travel-management company using the best available talent from both Hogg Robinson and GBT."
HRG CEO David Radcliffe praised the deal as well, adding, "I am particularly excited and heartened by American Express GBT's reassurance that it will be utilizing the best talent and technology from within both organizations to create a truly world-class, leading-edge organization, which will bring benefits to our clients, colleagues and supplier partners alike."