Insight Online News
Bengaluru, Dec 22 : Amazon is all set to acquire Prione Business Services Private Limited subject to requisite CCI approvals.
“Prione Business Services Pvt. Ltd., the joint venture between Catamaran and Amazon, will be acquired by Amazon subject to requisite regulatory approvals. Amazon will acquire Catamaran’s shareholding in Prione in compliance with applicable laws including all assets and liabilities,” said Catamaran and Amazon in a joint statement.
On August 9, the partners had announced their decision to not continue the JV beyond the end of its current term of May 2022.
The businesses of the Joint Venture will continue under the leadership of the current management, the statement said. On receipt of regulatory approvals, the board of Prione and Cloudtail will take steps to complete the transaction in compliance with applicable laws, it added.
Once the Competition Commission of India (CCI) approves the deal, Amazon will hold a cent percent stake in Prione.
In February 2019, Catamaran Ventures had raised its stake in Prione, which reduced Amazon Asia’s stake in Cloudtail to 24 percent from the earlier 49 percent, with Catamaran Ventures’ stake rising to 76 percent from 51 percent earlier.
Amazon did this rejig to make Cloudtail compliant with the rules. Reacting to this, the Confederation of All India Traders (CAIT) alleged that Amazon’s move was a circumvention of new rules. It alleged that Amazon reduced its stake in Prione to disassociate itself from Cloudtail.
CAIT had threatened to approach the Commerce Minister demanding that the government again clarify that online retailers should not hold direct, or indirect stake, in its sellers.
Amazon and Cloudtail had terminated their relationship following years of allegations from brick-and-mortar retailers that the seller received preferential treatment. Amazon had denied offering preferential treatment to any seller, including Cloudtail, saying it complies with Indian laws.
India prohibits foreign direct investment (FDI) in inventory-based models for e-commerce, and permits companies such as Amazon India and Flipkart to work only as marketplaces that allow businesses listed on their platforms to sell goods.