American Express has signed a definitive agreement to acquire Rosenbluth International, a leading global travel management company. Rosenbluth International owns and manages corporate travel operations in 15 countries and posted global business travel volume of over $3 billion in 2002. Terms of the transaction were not disclosed. The transaction is expected to be completed within the next few months, subject to regulatory approval.
This acquisition will expand American Express’ position as the largest corporate travel management company in the world and strengthen its ability to serve the interests of its clientele of small, mid-sized and large corporate customers. Last year, American Express booked global travel volume of $15.5 billion.
Under the terms of the agreement, American Express
will purchase all the shares of Rosenbluth International. The agreement excludes certain assets of Rosenbluth, including Up|Stream, an outsourced customer care business.
, Chairman and CEO of Rosenbluth International
, will take an active role in the integration process with a focus on customer and employee needs.
“Rosenbluth International is widely recognized for its exceptional client relationships, customer service and innovative technology, and we intend to build on their unique strengths, preserving what has made that company great,” said Ed Gilligan, group president, American Express Global Corporate Services. “Working together, we can raise the level of global servicing, deliver the savings benefits of economies of scale to customers and invest more in new technology solutions.”
“Rosenbluth International and American Express have complementary strengths that will mean improved service and savings to clients all over the world,” said Hal Rosenbluth. “Each of our companies has been serving travelers for over 100 years, and we have both invested in technology, globalization and employee development as the foundation for service delivery. Rosenbluth International has remained remarkably successful through the difficulties that the industry has experienced over the past three years. From this position of strength, we felt the time was right to combine forces with American Express to create the preeminent travel services company in the world.”
A Transformed Business Model to Meet Growing Client Needs
In the last few years, the travel agency model has been completely transformed, from one dependent largely on supplier commissions, to one in which clients pay directly for agency or travel management services. Further, in a tough economy, travel management services have been in great demand, as companies of all sizes have focused on reducing travel expenses by lowering both the cost of the travel process and the cost of travel itself.
In this environment, the most successful travel management firms require both size and scope. They offer a variety of service delivery options (from onsite offices to telephone call centers to online travel fulfillment); they meet client needs locally and globally, and they deliver service at a reasonable cost by taking advantage of economies of scale. They also are able to negotiate effectively for savings from suppliers and have the resources and scale to invest in the latest technology tools. This approach has been successful for both American Express and Rosenbluth International.
Broadening Customer Service
“Rosenbluth is known for having outstanding talent at all levels, and we hope to build upon this expertise and innovative energy as our two companies join forces,” said Charles Petruccelli, president, American Express Global Travel Services. “We will be working side by side to integrate our organizations so that we enhance the customer experience for small, mid-sized and large companies. At the same time, we believe we will be building a more efficient distribution channel that suppliers will value.”
, Rosenbluth’s president and chief operating officer comme4nted: “The needs of today’s corporate customers have grown exponentially. They want a wide range of options related to where and how they’re serviced. That means the travel management leader of the future needs the best people, the best technology and the best cost structure. That’s what this new organization can deliver.”
The transaction is expected to have no material impact on American Express Company’s earnings per share in 2003. It is expected to be neutral to slightly accretive to EPS in 2004 and 2005, with additional benefits expected in future years.
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(09/07/2003) Rosenbluth Provides Clients Real-Time Travel Intelligence
(17/06/2003) Rosenbluth Sees a Bright Spot in Business Travel