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UK’s CMA Blocks Sabre Acquisition Of Farelogix

 |  April 9, 2020

The UK Competition and Markets Authority (CMA) has blocked Sabre’s takeover of Farelogix in Britain despite a US court giving the acquisition the go ahead early this week.

A US District Court rejected a US Department of Justice anti-trust case against Sabre’s acquisition of new distribution capability (NDC) technology firm Farelogix on April 7.

However, the CMA found “airlines, travel agents and UK passengers would be worse off” if the deal went ahead.

Sabre announced the acquisition of Farelogix for $360 million in November 2018.

The DoJ subsequently announced an investigation and launched its lawsuit in August 2019, arguing the deal would eliminate competition in the distribution of air fares and “likely result in higher prices, reduced quality and less innovation”.

The CMA followed suit in the UK and had already completed an investigation, signalling it would block the merger in the UK pending consultation on its findings.

Sabre welcomed the DoJ ruling in a statement saying: “This federal court ruling supports our view that the Sabre-Farelogix acquisition is not anti-competitive.

However a spokesman said: “We are disappointed by the CMA’s findings, particularly in light of the US federal court’s ruling, which found Sabre’s acquisition of Farelogix is not anti-competitive and should not be prohibited.

“We are reviewing the CMA’s findings and will carefully consider our options.”

The company had previously noted the CMA had already “decided prohibition of the merger represents the only effective remedy to its competition concerns”.

Reacting on behalf of the DoJ, assistant attorney general Makan Delrahim said: “The Antitrust Division argued Sabre’s acquisition of Farelogix would extinguish a crucial constraint on Sabre’s market power and would result in higher prices and less innovation.

“We will closely review the court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of the American consumer.”

The CMA found Sabre’s purchase of Farelogix “could result in less innovation in their services, leading to fewer new features that may be released more slowly.

“Fees for certain products might also go up. As a result, airlines, travel agents and UK passengers would be worse off.”

Full Content: Gov UK

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