Socio Economic Enterprise Creation & Global Business Advisory

Joint Venture Formation and Negotiations

IXCEL has decades of experience and commercial negotiations of a JV agreement and create broad principles for a long term sustainable JV relationships. Below of are some of those learnings:

  • It is important to secure the right terms for a shared enterprise.
  • It is just as critical to form a sustainable relationship.
  • Joint ventures (JVs) are slow in the making, often with complicated structures and shared management teams.
  • JVs seem out of place in a volatile era marked by buzzwords that hype agility and nimble strategic moves.
  • More than 1,500 JV deals are completed annually over the past ten years, including around 10 percent of them characterised as large JVs, with an initial value of more than $250 million.
  • Given how much longer those negotiations can last compared to traditional acquisitions, it is important to invest more time and effort up front, work harder to cultivate and sustain the JV relationship, and standardise key processes and learning mechanisms .
  • One global conglomerate advises its US-based headquarters to expect JV negotiations to last three to six times longer than M&A negotiations .
  • Three principles that made a difference in deal negotiations :
    • Investing more time and effort up front.
    • Working harder to cultivate and sustain the JV relationship.
    • Standardising key processes and learning mechanisms.

We can assist in creating a new incorporated or unincorporated JV arrangements and can work on behalf of a side or create working models for all parties involved.