American Express Co., the largest corporate card issuer in the world, announced a significant expansion of its travel management services with the acquisition of the London-based Thomas Cook Group Ltd.'s travel business and its U.S. unit, Thomas Cook Partnership.
The purchase will expand American Express' worldwide travel sales by 33%, to more than $12 billion a year, and give it a chance to increase its Corporate Card business. The price of the companies, which have a combined $3 billion in annual sales, is $375 million.
"We expect to see an increase in the number of corporate cards and the volume of spending done on our cards directly as a result of the acquisition," said Harvey Golub, chairman and chief executive officer of American Express.
American Express is already the world's largest travel agency, with over $9 billion in travel sales yearly. As part of its Travel Management Services, American Express also provides the Corporate Card and related services to more than 1.5 million companies around the world.
"[This purchase] will give us opportunities to cross-sell corporate cards and consolidate corporate accounts around the world," said Roger Ballou, president of American Express Travel Services Group, in a telephone conference.
Christopher Rodriguez, chief executive of the Cook Group, said American Express will find opportunities to expand their corporate card business in several large foreign markets.
Germany, New Zealand, and Australia have less-developed corporate card businesses than other areas such as the United States and Canada, where many companies already pay with American Express or Diners Club cards, Mr. Rodriguez said.