Sabre Corporation has announced its intent to close a deal to acquire Farelogix on 21 August, warning the US Department of Justice (DOJ) that it will need to file a complaint by this date if it intends to do so.
The DOJ has been carrying out a “lengthy and exhaustive review of the transaction” since it was announced in November 2018, according to Sabre, but the company said the department will need to file a complaint in a federal court before the deal closes if it plans to block the purchase.
Sabre says it has been working with the DOJ to “demonstrate to them the unquestionable value of the transaction to its airline and agency customers, consumers and the travel ecosystem”.
It claims the combined company will drive faster innovation and allow airlines to accelerate their growth and profitability while providing better service to customers.
Sabre has committed to continue to offer Farelogix products at the same prices available today or lower and to support and invest in those solutions at the same level or higher. In addition, it will offer to extend any existing Sabre Global Distribution System - a major electronic worldwide reservation system used by travel agents to book flights, hotels, car rental and other travel services. The major players in this area are Sab... or Farelogix Open Connect contract on the same terms, including price, for at least three years.
Sean Menke, president and CEO of Sabre, said: “We are incredibly excited to close our acquisition of Farelogix so that airlines, travel agents, corporations and travellers can benefit from the end-to-end next-generation retailing solutions we will be able to deliver. This deal will allow us to provide our airline and agency customers with more and better choices, all while we continue to offer and invest in Farelogix’s current suite of products and services. Over the past nine months, we believe we have done all we can do to address the DOJ’s concerns. While we hope the DOJ will ultimately recognise that this transaction is pro-competitive, we are prepared to vigorously defend the deal in court if necessary.”
Sabre and Farelogix have agreed to extend the termination date of their acquisition agreement to 30 April 2020 to allow time for any challenge by the DOJ to be resolved.
The acquisition also came under the scrutiny of the UK Competition and Markets Authority (CMA), but the outcome of the first phase of the review is not due to be released until 16 August. In the meantime, the watchdog has issued an Initial Enforcement Order (IEO), which allows Sabre and Farelogix to close the transaction while preserving its right to conclude its review before the two companies merge.