The National Company Law Tribunal (NCLT) has allowed the merger of Amazon Transportation Services (ATSPL) with Amazon Seller Services (ASSPL), paving the way for the local arms of the US-based ecommerce firm to integrate its logistics arm directly into its primary marketplace entity in India.
Under the approved scheme, the share exchange ratio has been fixed at 38 new shares of ASSPL for every 10 fully paid-up equity shares of ATSPL. With the NCLT’s approval, ATSPL will stand dissolved, without winding up, and all its liabilities and legal proceedings will be transferred to ASSPL.
Since both companies are engaged in complementary businesses, the consolidation by way of amalgamation into a single entity will enhance shareholder value through their synergies and operational efficiencies, the companies said while seeking approval from the tribunal.
The merger allows Amazon to simplify its India structure amid tighter regulatory scrutiny, slower ecommerce growth and intensifying competition from quick commerce players.
Amazon did not reply to ET’s queries till press time.
Earlier this month, Amazon committed an investment of $30 billion in India by 2030 for business expansion, as well as its growing fulfilment and delivery network, which simultaneously supports parallel industries including packaging, manufacturing and transportation services.
The NCLT’s nod for the merger of ATSPL and ASSPL comes at a time when foreign-owned marketplaces are facing closer scrutiny over platform neutrality and preferential treatment.
Strategically, the merger allows Amazon to retain tight control over fulfilment and delivery experience without breaching India’s foreign direct investment rules, which prohibit inventory ownership by marketplace operators. It also aligns with consolidation trends among Indian ecommerce players, with rivals such as Flipkart’s Ekart Logistics and Meesho’s Valmo doubling down on in-house logistics.
Both ATSPL and ASSPL are majority-owned by Amazon Corporate Holdings.
ATSPL was set up in 2013 as an in-house logistics arm for the ecommerce marketplace and derives more than 95% of its revenue from Amazon. In 2023, the company opened its logistics services to third-party clients as well.
While allowing the merger application, the tribunal in Bengaluru had observed that both entities were currently loss-making, but the transferee company (ASSPL) reported a massive turnover of more than ₹25,406 crore for FY24.
ATSPL reported an operating revenue of ₹4,889 crore for the fiscal.
The division bench of judicial member Sunil Kumar Aggarwal and a technical member, Radhakrishna Sreepada, while approving the merger scheme, clarified that the order should not be construed as an exemption from payment of any stamp duty, taxes or any other charges in accordance with law or requiring any permission or compliance required under any law.
The tribunal also observed that shareholders of both the transferor company and the transferee company are incorporated under the laws of Singapore and Mauritius. Hence, the transferee company will have to comply with the provisions of those nations as well.
Source: Economic Times