Travelport's planned takeover of the Worldspan global distribution system faces intensified regulatory review by European competition authorities.
The European Commission said in early May that it had "identified serious concerns" the deal "might lead to significant impediments to competition". Travelport already owns rival GDS Galileo. The combined entity would be second only to Amadeus but would command market shares of 40% to 70% in Belgium, Hungary, Ireland, Italy, the Netherlands and the UK.
The EC review will determine if it would reduce competition and raise prices for travel agents, rental car firms, hotels and airlines. The review is scheduled to conclude by mid-September. The EC began studying the $1.4 billion transaction after it was first proposed in December 2006.
Travelport, once known as Cendant, says it will co-operate with the investigation. In a statement, Travelport notes that "alternative distribution channels such as supplier websites and other direct channels have expanded considerably in recent years and exert strong competitive pressures on GDSs such as Galileo". It says the transaction is still expected to close by the fourth quarter of 2007. Worldspan is now owned by New York investment firm Blackstone Group and California-based Technology Crossover Ventures.
Source: Airline Business
