Amazon acquires its largest seller Cloudtail’s subsidiary
Prione Business Servicesis a joint venture between the ecommerce giant and Narayan Murthy-led Catamaran.
- In August, Catamaran and Amazon had decided to not continue their joint venture after May 2022.
- India’s FDI norms do now allow foreign-owned ecommerce companies to sell products of companies or sellers it has a stake in.
AdvertisementAmazon on December 22 announced that it will acquire Prione Business Services, a joint venture between the ecommerce giant and Narayan Murthy-led Catamaran.
Prione is a wholly owned subsidiary of
"The businesses of the joint venture shall continue under the leadership of the current management and on receipt of regulatory approvals, the board of Prione and Cloudtail will take steps to complete the transaction in compliance with applicable laws," the two companies said in a joint statement.
In August, the two entities — Catamaran and Amazon — had decided to not continue their joint venture after May 2022.
The decision came as an aftermath of the Supreme Court’s ruling that allowed antitrust watchdog, Competition Commission of India (CII), to conduct an investigation into the alleged anti-competitive practices of Amazon and its counterpart Flipkart.
However, it is also important to note that the Indian foreign direct investment (FDI) norms prohibit any foreign-owned ecommerce entity to give preferential treatment to a seller. Besides this, it also bars them from selling products of companies or sellers they have a stake in. These amendments were made in the Press Note 2 of 2018.
Soon after the Press Note 2 came into existence, Catamaran Venture raised its stake in Prione Business Services from 51% to 76%. Amazon, on the other hand, reduced its shareholdings to 24%. The move had made it compliant to India’s FDI amendment.
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