NEW YORK — The
parent company of WorldTravel BTI is relandscaping the corporate
travel battleground with a couple of acquisitions and the decision
to sever a longstanding partnership.
BCD Holdings, a
Dutch family-owned travel and financial services company, will
create a new travel management brand by patching together
WorldTravel BTI with TUIs business travel subsidiaries and a
majority stake in U.K.-based The Travel Co.
The purchases of
TUIs corporate travel business and The Travel Co should be
completed in March. The TUI transaction is subject to regulatory
If approved, the
move would create the worlds third-largest travel management
company, with $8.5 billion in annual sales, behind American Express
and Carlson Wagonlit Travel.
The new brand,
under a single management, would employ more than 10,000 people,
and operate on five continents. The TUI portion of the transaction
contributes $3.5 billion in sales, and The Travel Co. pitches in
CEO, Mike Buckman, will be the CEO of the new entity; BCDs Joop
Dreschel will be chairman. Marc Hildebrand and Mike Walley, CEOs of
TUIs business travel division and The Travel Co., respectively,
will remain in leading roles.
A new brand name is
expected be unveiled in March. Possible headquarters for the new
company include Atlanta, New York, London and Amsterdam. Officials
declined to reveal the financial terms of the
In our business,
scale is very important in terms of our ability to negotiate with
our suppliers and to provide services to our accounts, said Mary
Ellen George, executive vice president of sales and marketing at
WorldTravel BTI, which projects $4.09 billion in 2005 sales.
(SeeIn the Hot Seat: Mary Ellen George.) Thats
really what we are up to. Its been the plan of BCD for the last few
years to get to that size.
The decision to
acquire the two travel management companies came after unsuccessful
talks with Hogg Robinson, BCDs longtime 50-50 joint venture partner
in Business Travel International (BTI), she said. BCD and Hogg
Robinson revealed that they will part ways and pursue independent
strategies in going after new business, although they signed a
service agreement in which they will honor contracts with existing
clients under the BTI brand.
meanwhile, rippled across the corporate market, effectively ending
the TUI-Navigant International global joint venture — TQ3 Travel
Under the terms of
the BCD-TUI transaction, BCD will acquire TUIs wholly owned
businesses in Belgium, Canada, France, Germany, India, Luxembourg,
the Netherlands, the Nordic region, South Africa, Spain and the
U.K. However, the transaction does not include affiliates of TQ3 or
ownership of the TQ3 name.
acquired by BCD Holdings must cease using the TQ3 brand by the end
Ian Corydon, an
analyst for B. Riley & Co., said the transaction will hurt
Navigant, which will lose the international reach provided by its
joint venture with TUI. The joint venture was instrumental in
Navigants securing contracts with multinational companies such as
Bank of America, Corydon said.
Navigant and TUI
agreed to terminate their joint venture immediately, with the
latter transferring its 50% stake to Navigant, which retains the
rights to the TQ3 brand and will manage the remaining TQ3
international network offices. TUI and Navigant said they will
honor existing contracts with clients and partners.
Edward Adams, the
chairman and CEO of Navigant, termed the developments very positive
in that TUI paid Navigant an exit fee for leaving the joint
venture, giving the Denver-based company new opportunities to
expand the TQ3 brand globally. According to Adams, one of the
reasons TUI opted out of the joint venture was to focus on leisure
travel, the German companys core business.
Adams said Navigant
will maintain relationships with TQ3 licensees and expects to be a
little more aggressive in taking ownership positions in a number of
Navigant ranked No.
4 and WorldTravel BTI ranked No. 6 in Travel Weeklys 2005 Power List of U.S.-based travel
will compete with Navigant and the TQ3 brand in the U.S., said
George, but it will face less competition from Navigant globally.
The TQ3 Network will be much smaller than American Express, Carlson
or the WorldTravel-TUI-The Travel Co. combination, she
acquisitions put to rest speculation about TUIs expansion into the
North American corporate travel market.But George said that BCDs
new company, with TUIs corporate businesses in the fold, will still
be considering additional growth opportunities.
Meanwhile, in this
complex web of relationships, Boron Securities, the personal
investment arm of the John Fentener van Vlissingen family (which
owns BCD Holdings) retains ownership of about 11% of Navigants
common stock, according to a June SEC filing.
downplayed the significance of that investment, saying Boron
Securities is completely separate and is in no way operationally
connected to our organization.
At the same time,
Hogg Robinson, which owns Sea Gate Travel and BTI Canada in North
America, said that it is a global company in its own rightand
believes in a single ownership in strategic markets.
So, do these
developments mean joint ventures should be viewed as outdated in
corporate travel? No, said George.
It can still be
done because we proved it works, she said. Its just that when you
start investing in the technology to bring that to life, its more
of an obstacle when you are not dealing in a wholly owned
reporter Dennis Schaal, send e-mail to [email protected].