Vendors who want to get Amazon.com Inc. as a customer for their goods and services may find that their business has a downside: Amazon’s right to buy large stakes in their companies at potentially high discounts on market value.
The technology and retail giant has closed at least a dozen deals with publicly traded companies in which it obtains rights, called warrants, to buy shares of suppliers in the future at prices that could be lower than the current price. market, according to corporate documents and interviews with people involved in the agreements.
Amazon over the past decade has also made more than 75 such deals with private companies, according to a person familiar with the matter. In all, the tech titan’s stakes and potential stakes run into the billions of dollars on companies that provide everything from call center services to natural gas, and in some cases position Amazon among the top shareholders of those companies.
The unusual arrangements offer another window into how Amazon uses its weight in the market to increase its wealth and influence. The company has come under increasing scrutiny from regulators and legislators over its competitive practices, including the companies with which it partners.
While the deals can benefit vendors by closing large deals, which can also boost their share prices, executives at several of the companies said they felt they couldn’t reject Amazon’s push for the right to buy the shares. without risking an important contract. In some cases, the agreements also give Amazon rights as representation on the board and the ability to outbid any takeover bids from other companies.