JOINT VENTURES usually bring together companies from different countries and industries, of different sizes, and with different ownership structures – e.g. state-owned enterprises vs. listed companies vs. family-owned or privately-held companies. As a result, JV CEOs and Boards have to deal with enduring cultural and organizational differences among the parent companies, while also building a common culture in the venture – challenges not faced in M&A transactions or within wholly owned companies. As one CEO said, “It’s like being a peace negotiator or an arbitrator of a high-stakes legal case – except the negotiations never end.”
INTERNATIONAL JOINT VENTURES continue to rattle across the newswires. In the last month, UK-based Vodafone and U.S.-based Liberty Global announced an agreement to consolidate their Dutch operations into a €3.5 billion 50:50 JV that will combine their respective positions in the country’s mobile and cable markets. Days before, KBR of the U.S. announced that its joint venture with Elbit Systems of Israel was awarded a major contract with the UK Ministry of Defence to support flight training. Days before that, Qualcomm of the U.S. announced a $250 million JV with a Chinese provincial government to design, develop, and sell advanced server-chip technology in China.
