CCI clears Amazon’s proposal to buy Catamaran’s stake in Cloudtail parent

Bengaluru: The Competition Commission of India (CCI) has cleared Amazon’s proposal to acquire Catamaran Ventures’ entire 76% stake in Prione Business Services, which houses Cloudtail, one of the largest sellers on the ecommerce major’s Indian platform.

ET reported on December 22 that
Amazon had sought the anti-trust regulator’s nod for the deal.

CCI on Wednesday said on Twitter that it had approved the transaction. Its detailed order was yet to be available till late on Wednesday.

The future of Cloudtail is uncertain as the current regulations prohibit an entity running an online marketplace and its group companies from owning equity in any of the sellers on the platform or having control over their inventory.

Top Amazon India executives are expected to hold a meeting on the matter on Thursday, people aware of the developments said.

ET had reported on December 22 that Amazon had sought the anti-trust regulator’s nod for buying the stake of Catamaran – the investment office of Infosys cofounder NR Narayana Murthy – in Prione.

If the deal receives the CCI’s nod, Prione’s business – offering services like seller onboarding and making catalogues for them – is expected to continue unchanged, but Cloudtail may have to go through changes in its shareholding to continue as a seller on Amazon India, as the report had said.

The potential meeting on Thursday among Amazon executives may throw more light on the matter.

Sources close to Amazon had said in December that the etailer is likely to absorb the staff as many of them have worked closely with the company.

Catamaran and Jeff Bezos-led Amazon had announced the proposed deal in a joint statement in December. This was of significance given that Amazon had said in August that it had mutually decided with Catamaran to not continue their joint venture beyond the end of its current term ending on May 19, 2022.

In 2019, in order to comply with the new FDI regulations for ecommerce, Amazon had been forced to reduce its stake in Prione from 49% to 24%, with Catamaran owning the rest.

Cloudtail was set up in 2014 and it soon emerged as one of the largest sellers on the local marketplace of Amazon in India. In 2020-21, its revenue shot up by over 45% to Rs 16,639 crore with a profit of more than Rs 182 crore.

At one point of time, Cloudtail was clocking more than 50% of total sales on Amazon India before government tightened rules in 2016, which stated that a single seller cannot account for over 25% of total sales on an online marketplace.

Later, Amazon India started working with more sellers to diversify its seller base. The US ecommerce major also struck a joint venture with Patni Group in 2017 to set up Frontizo Business Services. While Frontizo is involved in offering customer support services to Amazon India, its subsidiary Appario Retail is another major seller on the Amazon India marketplace. Appario Retail clocked revenue of Rs 14,628 crore in FY21 with a profit of Rs 54 crore.

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