Sabre and Farelogix have officially terminated their merger
agreement amid the UK Competition and Markets Authority’s decision to block the
deal.
The agreement, believed to be worth US$360 million, expired
at midnight on 30 April and Sabre said both parties decided not to pursue the
matter any further.
Both Sabre and Farelogix dispute the CMA’s claim that the
merger was anti-competitive. After facing a lawsuit from the Department of
Justice in the US, a judge for the US District Court for the District of Delaware
ruled in favour of the deal. However, the CMA said its job was to look after
the interests of UK consumers and that it believed the agreement would see airlines
and their passengers miss out on technological innovation, even though Sabre
and Farelogix are US-based companies.
Sabre CEO Sean Menke commented: “We continue to believe that
the transaction was not anti-competitive, a result confirmed by the US federal
district court’s decision in Sabre’s favour. Unfortunately, the United Kingdom’s
Competition and Markets Authority – acting outside the bounds of its
jurisdictional authority – has prohibited the transaction. We strongly disagree
with the CMA’s decision.
“We remain committed to our long-term goal of creating a new
market for personalised travel. Positioned at the centre of the business of travel,
Sabre is a critical component of the travel ecosystem. We are uniquely situated
to create solutions that expand the distribution access of rich content via the
GDS marketplace and also help airlines create personalised offers for their
customers, including the development of NDC-enabled solutions.”
It is believed Sabre could owe Farelogix up to US$25 million
for the failure of the deal, though neither party has disclosed this
information.
The news comes at a time when the global travel industry is
struggling with the financial impact of the coronavirus pandemic, with airlines
having grounded the vast majority of their aircraft.