The Proposed Acquisition of Farelogix by Sabre

Abstract

On November 14, 2018, Sabre Corporation announced an agreement to acquire Farelogix, Inc. for $360 million. Sabre is a global distribution system, a company that compiles information from airlines, supplies this information to travel agents who book flights and complete other transactions through its interface. Farelogix is a technology company that sells various technology services to airlines. The proposed merger was investigated by both the US Department of Justice (DOJ) and the UK Competition and Markets Authority (CMA). The DOJ challenged the merger, which led to a two-week trial in January and February of 2020 in the United States District Court for the District of Delaware (the US Court). The US Court ruled against the DOJ on April 7, 2020. Two days later, the CMA issued its final report: The CMA concluded that the proposed merger would lead to a Substantial Lessening of Competition. The merging parties abandoned their merger shortly thereafter, on May 1, 2020. In this chapter we discuss the economic analysis of the merger across both the DOJ and CMA reviews.

JEL Classification: K21, L49