Amazon to acquire Catamaran’s shareholding in Prione Business Services
- ByStartupStory | December 23, 2021
Prione Business Services, the joint venture between Narayan Murthy-led Catamaran and Amazon, will be acquired by Amazon. Prione’s wholly-owned subsidiary Cloudtail India is one of Amazon’s largest sellers in the country.
“Amazon will acquire Catamaran’s shareholding in Prione in compliance with applicable laws including all assets and liabilities,” the two companies said in a joint statement on December 22.
“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 statement added.
So far the two companies jointly own Prione Business Services, whose wholly-owned subsidiary Cloudtail India has repeatedly come under the scanner for alleged violation of Foreign Direct Investment (FDI) norms.
On August 9 this year Amazon and Catamaran announced their decision to not continue the joint venture beyond the end of its current term of May 2022. This decision came following the Supreme Court’s decision which allowed the Competition Commission of India (CCI) to conduct an investigation into the alleged anti-competitive practices of Amazon.
While for now Cloudtail will continue as a seller on Amazon, it wasn’t immediately clear if it could continue as post this acquisition since the e-commerce rules bars marketplaces from having any ownership in the firms run by their sellers.
In India, e-tailers are known to be having a set of preferred vendors who get a majority of the business generated by these companies.
In 2018, the government had come up with Press Note 2, revising the then-existing Press Note 3. It asked the marketplaces to ensure that they will not sell the products of their group companies on their platforms.
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