Joint Venture (JV)
A Joint Venture (JV) is a business entity that enables two or more parties to pool their resources for a specific project or business activity, sharing the risks and rewards proportionally.
- Context:
- It can (typically) be associated with a Joint Venture Agreement.
- ...
- Example(s):
- Sony-Ericsson JV,
- Hulu.
- ...
- Counter-Example(s):
- See: Owens-Corning, Shared Ownership, Economic Risk. Strategic Alliance, Partnership, Consortium.
References
2024
- (GM-RKB ChatGPT, 2024) ⇒ Prompt: Summarize the concept Joint Venture (JV) in 1- 2 paragraphs. GM-RKB ChatGPT (model: gpt-4-1106-preview). Retrieved: 2024-01-14.
- QUOTE: A Joint Venture (JV) is a strategic business arrangement where two or more parties agree to combine resources for a specific project or business activity. The parties involved in a JV maintain their distinct separate legal entities but work together to manage and operate the joint enterprise. Typically, each participant contributes assets, shares risks, and takes a proportionate share of the profits and losses.
Joint ventures are often formed to leverage the unique strengths of each partner, such as combining capital, expertise, technology, or market access to jointly achieve objectives that might be difficult to reach independently. The duration of a JV can be for a single project or a continuing business relationship, and it ends when the goal is accomplished or at a point agreed upon by the parties. The terms of a JV are detailed in a contract that outlines the roles, responsibilities, and ownership percentages of each party.
- QUOTE: A Joint Venture (JV) is a strategic business arrangement where two or more parties agree to combine resources for a specific project or business activity. The parties involved in a JV maintain their distinct separate legal entities but work together to manage and operate the joint enterprise. Typically, each participant contributes assets, shares risks, and takes a proportionate share of the profits and losses.
2023
- (Wikipedia, 2023) ⇒ https://en.wikipedia.org/wiki/Joint_venture Retrieved:2023-8-8.
- A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to access a new market, particularly emerging market; to gain scale efficiencies by combining assets and operations; to share risk for major investments or projects; or to access skills and capabilities. According to Gerard Baynham of Water Street Partners, there has been much negative press about joint ventures, but objective data indicate that they may actually outperform wholly owned and controlled affiliates. He writes, "A different narrative emerged from our recent analysis of U.S. Department of Commerce (DOC) data, collected from more than 20,000 entities. According to the DOC data, foreign joint ventures of U.S. companies realized a 5.5 percent average return on assets (ROA), while those companies’ wholly owned and controlled affiliates (the vast majority of which are wholly owned) realized a slightly lower 5.2 percent ROA. The same story holds true for investments by foreign companies in the U.S., but the difference is more pronounced. U.S.-based joint ventures realized a 2.2 percent average ROA, while wholly owned and controlled affiliates in the U.S. only realized a 0.7 percent ROA."
Most joint ventures are incorporated, although some, as in the Oil and gas industry, are "unincorporated" joint ventures that mimic a corporate entity. With individuals, when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are "co-venturers".
The venture can be a business JV (for example, Dow Corning), a project/asset JV intended to pursue one specific project only, or a JV aimed at defining standards or serving as an "industry utility" that provides a narrow set of services to industry participants.
Some major joint ventures include United Launch Alliance, Vevo, Hulu, Virgin Media O2, Penske Truck Leasing, and Owens-Corning.
- A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to access a new market, particularly emerging market; to gain scale efficiencies by combining assets and operations; to share risk for major investments or projects; or to access skills and capabilities. According to Gerard Baynham of Water Street Partners, there has been much negative press about joint ventures, but objective data indicate that they may actually outperform wholly owned and controlled affiliates. He writes, "A different narrative emerged from our recent analysis of U.S. Department of Commerce (DOC) data, collected from more than 20,000 entities. According to the DOC data, foreign joint ventures of U.S. companies realized a 5.5 percent average return on assets (ROA), while those companies’ wholly owned and controlled affiliates (the vast majority of which are wholly owned) realized a slightly lower 5.2 percent ROA. The same story holds true for investments by foreign companies in the U.S., but the difference is more pronounced. U.S.-based joint ventures realized a 2.2 percent average ROA, while wholly owned and controlled affiliates in the U.S. only realized a 0.7 percent ROA."
2017
- (Wikipedia, 2017) ⇒ https://en.wikipedia.org/wiki/letter_of_intent Retrieved:2017-6-5.
- A letter of intent (LOI or LoI, and sometimes capitalized as Letter of Intent in legal writing, but only when referring to a specific document under discussion) is a document outlining one or more agreements between two or more parties before the agreements are finalized. The concept is similar to a heads of agreement, term sheet or memorandum of understanding. Such outlined agreements may be mergers and acquisitions transaction agreements, joint venture agreements, real property lease agreements and several other categories of agreements that may govern material transactions.