NCLT Clears Amazon Marketplace Merger with Logistics Unit

• Amazon Transportation Services (ATSPL) merges with Amazon Seller Services (ASSPL), consolidating operations in India
• The merger follows a 38:10 share ratio, with ATSPL dissolved and its liabilities transferred to ASSPL
• Streamlines operations, supports Amazon's $30 billion India investment, and ensures control over fulfilment without violating FDI rules

The merger of Amazon Transportation Services Private Limited (ATSPL) and Amazon Seller Services Private Limited (ASSPL) has received approval from the National Company Law Tribunal (NCLT) to allow Amazon to consolidate their logistics and marketplace operations within India.

 The merger has established a share exchange ratio of thirty-eight new shares of ASSPL for every ten fully paid equity shares of ATSPL. In addition, following the merger, the AT SPL will be dissolved, and all of the company’s liabilities and all pending legal action will transfer to ASSPL.

In addition to combining ATSPL and ASSPL's businesses together through this merger for mutual benefit, by combining through one corporate structure, both companies can achieve greater economies of scale and operational efficiency with shared resources.

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The merger is in line with current trends affecting Amazon, including stricter regulation, slowing growth of e Commerce, and higher competition from fast-growing commerce companies. Amazon is expected to create additional stockholder value due to improved efficiencies resulting from this merger.

This month, Amazon announced a $30 billion investment in India by 2030 to build Amazon’s business, fulfilment, and distribution networks to support packaging and manufacturing businesses.

Through this acquisition, Amazon has further enhanced its ability to manage both fulfilment and distribution, in compliance with the FDI regulation that prohibits marketplace operators from owning an inventory. ATSPL has been operating as Amazon's internal logistics division since 2013, with nearly all of its revenues generated from Amazon; however, ATSPL began taking on third-party customers in 2023.

The NCLT indicated that though the two companies were both operating at a loss, ASSPL generated ₹25,406 crores in revenue during FY24. However, this approval is contingent upon compliance with the applicable laws and regulations.