American Express Acquires Tock to Expand Dining Industry Presence

American Express (AmEx) has announced its acquisition of Tock, a restaurant booking platform previously owned by Squarespace, for $400 million in an all-cash transaction. This move aims to bolster AmEx’s footprint in the mining sector, which saw $100 billion in spending on its cards last year.

The acquisition of Tock follows AmEx’s 2019 purchase of Resy, another online restaurant reservation platform. Resy provides AmEx cardholders exclusive benefits such as early reservations, special access, and cashback on bookings.

By integrating Tock into its portfolio, AmEx will add approximately 7,000 restaurants, wineries, and hospitality businesses to its network. This acquisition enhances AmEx’s ability to target its premium customer base, which is known for substantial spending habits.

Business Strategy and Customer Engagement:

AmEx has traditionally differentiated itself by offering premium perks that justify higher annual fees than competitors.

This strategy is pivotal in achieving growth targets, as it attracts affluent consumers and boosts customer engagement through exclusive dining experiences facilitated by platforms like Resy and now Tock.

Market Insights and Analyst Opinion:

William Blair analyst Cristopher Kennedy highlighted that these acquisitions serve as distribution channels, driving new customers to the AmEx brand.

Moreover, AmEx’s acquisition of Rooam, a contactless payments platform used by hospitality businesses, underscores its commitment to enhancing services within the small and medium enterprise market.

Financial and Strategic Implications:

The acquisition of Tock expands AmEx’s service offerings and supports its efforts to capitalize on the mining industry’s lucrative opportunities.

Despite recent slowdowns in spending growth among small and medium enterprises, AmEx remains optimistic about this market segment’s potential.

Corporate Moves and Industry Dynamics:

Squarespace, which acquired Tock in 2021 for a similar $400 million sum, will streamline its operations as it prepares to go private under Permira in a nearly $6.9 billion transaction.

Meanwhile, AmEx shares have outperformed the S&P 500 this year, reflecting investor confidence in its strategic acquisitions and market positioning.