The news of American Express GBT's proposed acquisition of HRG was surprising but not unexpected.
Talk of an Amex GBT purchase of HRG has been rife since at least the beginning of this century and the formation of GBT coupled with the trajectory of HRG, including the lack of a viable strategy for North America, makes it a logical move. Although, to be fair, HRG could have just as easily gone to CWT.
At the same time, HRG's expense management subsidiary, Fraedom (formerly SpendVision) is going to Visa.
HRG's big focus on technology solutions development highlighted its own quest for more value and had always pointed in one direction, ie a sale to another multinational TMC.
And while we have all been distracted by contemplating the effects of airline consolidation, it's worth thinking about the effect of payments and TMC consolidation on the future intermediary landscape for corporate buyers.
HRG's clients might be well advised to reflect on lessons from American Express's takeover of Thomas Cook in 1994. It was a long time ago and travel companies were still discussing how to set up a web page, but some business principles don't change.
Back almost a quarter of a century ago Thomas Cook was a prominent business travel agent (as TMCs were then known) and had the accounts of many prominent companies.
The question asked of that Amex acquisition was "What are they buying?" — client contracts, yes, but what true benefit can short-term client contracts bring to a business? After all Thomas Cook had gained some clients precisely because they didn't want to be with Amex.
People today analyse acquisitions in much more grown-up language around taking out cost and management synergy and the vision of a technology nirvana for clients rather than just 'take out competition'. But clients choose TMCs for many reasons and slick technology processes are only one. Amex GBT and HRG have inevitably been targeting many of the same potential clients but, as the old Amex discovered, removing a potential competitor does not guarantee a stable of happy and loyal clients.
This client base might want a multinational TMC but it might not appreciate the pool having been reduced to technology processing giants with different specialties concentrated in different parts of the globe, as both CWT and Amex GBT appear to do. Of course, there is also BCD, but there the multinational stable seems to end.
Or does it? Is this an opportunity for those right behind who are steadily building global networks such as FCM, Egencia and ATPI?
Buyers will always want to know they have a choice when it comes to travel management company. Taking out a competitor and integrating its technology solutions clearly has business benefits but will it have long-term value for Amex GBT?
And will HRG's existing clients embrace American Express in the long term?