United Kingdom

Creating and setting up a Joint Venture 

Creating a new joint venture or strategic alliance requires skills which can often be in short supply, simply because this is not a regular activity for many businesses.  Our Joint Ventures Practice focuses exclusively on this area and can offer support from pre-deal strategy though to implementation and governance.

Clients' current top concerns

  • Key cultural pitfalls and levers when entering a new/BRIC market via a JV
  • Alternative JV/alliance structures and how to balance the risk/reward they involve
  • What should go into a Memorandum of Understanding or JV Agreement?
  • The biggest pitfalls in set-up and transition and how to avoid them

Recent projects and insights

Joint Venture pitfalls in China

A global medical company had attempted JVs in China before and failed.  Business in China was deemed critical to its growth plan.  The company found out about KPMG’s Joint Ventures Practice and asked for our insight and advice to be confident in the reputation, business practices and fundraising ability of a potential Chinese partner. We helped alleviate particular concerns around intellectual property protection, obtaining institutional shareholder support and creating a practical structure in a complex and unfamiliar jurisdiction. 

Smaller companies can punch above their weight

Our client needed help to protect their position when negotiating a Joint Operating and Farm-in Agreement with two international oil companies.  Reviewing the draft documentation proposed, we identified significant threats to value and then provided advice “in the room” as our client negotiated key terms, based on robust technical, operational, regulatory, economic and financial arguments.

Middle Eastern partnerships

When a market-leading UK service provider wanted to kick start international growth via a partnership in the Middle East, they reached out to KPMG.  The unfamiliar cultural and complex commercial components of their deal demanded local and technical knowledge, as well as experience of Arabic-style negotiation. KPMG managed the deal process, finding solutions to issues as they arose, so that the deal was delivered on time, in full and on budget.

 

Knowing when to say no

A major Eastern European natural resources company was about to sign a deal to build a US $multi-million production facility in India. They asked KPMG to assess the draft JV Agreement and signed Memorandum of Understanding for practicality and alignment to their goals. We identified significant risks and shortfalls in the proposed operating model, governance structure, financing and capital protection. These proved difficult to mitigate adequately, so the client decided to withdraw and pursue other opportunities.

Contact

Dr Marc Van Grondelle

Dr Marc van Grondelle

Head of the Global Joint Ventures Practice

+44 20 7694 4603

Email Marc

  

“Setting up a JV demands a unique balance of commercial, cultural and operational skills.  I’ve done it and it’s tough.”

 

Brad Johnson

Brad Johnson

Global Joint Ventures Practice

+44 20 7694 1083

Email Brad

 

                     “From Russia to the Middle East and S E Asia. I've found building JVs and alliances can be complex, with constantly changing demands.”

 

Daniella Carneiro

Daniella Carneiro

Global Joint Ventures Practice

+44 20 7694 3097

Email Daniella

 

 

Back to homepage

Related publications

Related services