Prione Business Services was formed in 2014 and was coming up for renewal on May 19, 2022. In August this year, Amazon and NR Narayana Murthy’s Catamaran announced that they will not continue their JV beyond May 2022. The two parties had not disclosed the reason behind the decision. Cloudtail – a wholly-owned subsidiary of Prione Business Services – is one of the biggest sellers on Amazon.in.

In a statement on Wednesday, Amazon said it will acquire Prione Business Services, subject to requisite regulatory approvals. “Amazon will acquire Catamaran’s shareholding in Prione in compliance with applicable laws including all assets and liabilities. The businesses of the JV 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,” it added.

While Amazon did not share further details, sources said the US e-commerce company has approached the Competition Commission of India (CCI) for approval for the deal.

The move comes at a time when there is a greater scrutiny on the operations of e-commerce marketplaces in India that have foreign investments. In 2020, fair trade regulator CCI ordered a probe against Amazon and Walmart-owned Flipkart for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms.

Trader bodies like CAIT have also contended that such practices by these companies have severely impacted the business of offline retailers.

In 2018, the government had introduced stricter norms for e-commerce marketplaces with foreign investments, mandating that they do not sell products of their group companies on their platforms. Following this, Prione Business Services was restructured. While the companies did not divulge details, sources had said Amazon’s holding came down from 49 per cent to 24 per cent stake post the restructuring.

As per regulatory documents, Cloudtail India – one of the largest sellers on Amazon India marketplace – clocked over 45.7 pc rise in revenue to Rs 16,639.04 cr, while its profits more than doubled to Rs 182.70 cr in the financial year 2020-21 over the previous fiscal. Cloudtail’s net profit grew over 170 per cent to Rs 182.7 crore in the financial year 2020-21 as against Rs 67.54 cr in the financial year 2019-20.