Joint Venture Consulting and Advisory

Shareholder Representatives in JVs: Legal Proxy, Accountable Executive, or Muddying Interloper?

IN CERTAIN INSTANCES, a company will appoint an individual to serve as its “Shareholder Representative” to a joint venture. The basic premise is that the Shareholder Representative is expected to act as the company’s agent with regard to the venture – a role that is empowered but not necessarily limited to ...

Innovation in Joint Ventures: Do or Die?

IN INDUSTRIES LIKE HIGH-TECH, telecommunications, and healthcare, innovation is critical to sustained competitiveness and performance. Joint ventures operating in these fast-moving markets often must compete with innovation machines like IBM, and with PE-backed startups. In our experience, the ownership ...

JV Dealmaking: When to Kick the Can Down the Road

IMAGINE YOU HAVE been tasked with negotiating a joint venture agreement. Months of grueling negotiations have consumed significant resources and have led to agreement between your company and the counterparty on all but a couple of items. These items will require significant work to resolve and are critical to ...

Consolidation Joint Ventures: Why to Consider These Deals

SOMETHING BIG SEEMS TO BE happening at corporate lunch counters the world over. We’ve recently been involved in a series of client conversations involving the formation of new consolidation JVs – that is, ventures to combine mature businesses into a jointly-owned entity. The oil and gas industry, beset by low ...

How Due Diligence Differs for M&A and Joint Venture Deals

JOINT VENTURE AND M&A due diligence are superficially similar. Both follow the same basic process, starting when a preferred counterparty is identified and confidentiality agreements are signed, and usually concluding just prior to the signing of definitive agreements. Both use similar advisors to investigate ...

Valuation of Joint Ventures: 4 Steps to Handling Hard-to-Value Contributions

COMPANIES ROUTINELY FIND themselves in painful joint venture negotiations, reaching “walk-away points” and failing to close deals because of hard-to-value contributions, differences in key assumptions, or valuations that do not support the desired ownership or control split. Relief lies in a paradox: While ...

Strategy Under Scrutiny

IN MANY JOINT VENTURES – including those in semiconductors, financial services, media, healthcare, and natural resources – the owners are also the JV’s customers, channel, suppliers, users, or otherwise actively participate in the same markets as the venture (Exhibit 1). Intel, Samsung, and AMD all own ...

Financial Modeling for Joint Ventures: The Total Venture Economics Approach

EARLY RESULTS OF OUR recent study on how companies perform across different aspects of the JV dealmaking process has revealed fairly pedestrian performance all around, with critical gaps across key functions within core JV transaction workstreams. With respect to financial modeling, for example, we find that ...

Corporate Social Responsibility in Non-Controlled Joint Venture Assets: Why Corporate Boards Should Care

LAST YEAR, WE wrote about why corporate Boards of Directors should care about their portfolios of non-controlled joint ventures. In short, these portfolios tend to be more material than realized, carry underappreciated and often inappropriately managed levels of risk, and contain latent performance upside – ...

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