Amazon India is mulling to acquire the stake of Narayana Murthy-owned Catamaran in Prione Business, the parent company of Cloudtail, one of the largest sellers on the e-commerce giant’s India platform. The investment office of Infosys co-founder Narayana Murthy and the Jeff Bezos-owned e-commerce giant also issued a joint statement to make their decision public.
Amazon is seeking permission from India’s anti-trust watchdog to acquire Narayana Murthy-owned Catamaran Ventures’ stake in Prione Business Services, which controls Cloudtail, the biggest and longest-serving seller on its platform.
Prione Business Services was set up as a joint venture between Catamaran and Amazon in 2014. Amazon will acquire the entity subject to requisite regulatory approvals, and both companies said on December 22, 2021.
“Amazon will acquire Catamaran’s shareholding in Prione in compliance with applicable laws, including all assets and liabilities. The businesses of the Joint Venture shall continue under the leadership of the current management. On receipt of regulatory approvals, the board of Prione and Cloudtail will take steps to complete the transaction in compliance with applicable laws,” the joint statement said.
The companies have refused to reveal the deal size citing confidentiality. After Amazon takes control, Cloudtail wouldn’t continue as a seller under the current laws that prohibit an entity running an online marketplace and its group companies from owning in any of the sellers on the platform or owning inventory.
A brief history of controversies
In 2019, Amazon had to cut its stake in Cloudtail’s parent Prione and Catamaran increased its shareholding to comply with laws per foreign direct investment rules.
On August 09, 2021, both Catamaran and Amazon announced their decision not to continue the JV beyond the end of its current term of May 2022.
The announcement had come on the same day when the Supreme Court dismissed petitions by Amazon and rival Flipkart to quash a probe by the competition watchdog over alleged practices such as preferential treatment to sellers.
Both companies announced on August 9 that Prione Business Services Pvt Ltd, the joint venture between Amazon and Catamaran, is coming up for renewal on May 19, 2022. The two partners have mutually decided not to continue their joint venture beyond the end of its current term.