Subject to CCI clearances, Amazon is expected to purchase Prione Business Services Private Limited.
The partners announced their intention to not extend the JV beyond its existing term of May 2022 on August 9.
The Joint Venture’s operations will continue under the present management, according to the statement. The board of directors of Prione and Cloudtail will take steps to execute the deal in accordance with applicable legislation once regulatory clearances are received, according to the statement.
If the purchase is approved by the Competition Commission of India (CCI), Amazon would own a 100% share in Prione.
Catamaran Ventures increased its position in Prione in February 2019, reducing Amazon Asia’s share in Cloudtail to 24 percent from 49 percent before, with Catamaran Ventures’ stake growing to 76 percent from 51 percent previously.
“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.
This change was made by Amazon to bring Cloudtail into compliance with the requirements. The Confederation of All India Traders (CAIT) reacted by alleging that Amazon’s move was a violation of the new guidelines. Amazon allegedly lowered its investment in Prione to distance itself from Cloudtail, according to the report.
CAIT had vowed to write to the Commerce Minister, requesting that the government reaffirm that online merchants should not have direct or indirect ownership in their sellers.
Following years of claims from brick-and-mortar merchants that the seller enjoyed the preferential treatment, Amazon and Cloudtail ended their agreement. Amazon has denied giving any merchant, including Cloudtail, special treatment, claiming that it conforms with Indian legislation.
India forbids FDI in inventory-based e-commerce models, allowing firms like Amazon India and Flipkart to operate only as marketplaces, allowing businesses listed on their sites to sell items.
