Joint ventures survey

46% of businesses have had transaction plans altered due to COVID-19.

As with other types of transaction, uncertainty stemming from the pandemic has impacted plans for collaboration, although the relative effect and duration of such uncertainty is variable depending on sector.

Of those who had clear plans, 44% are looking to form a JV in the next 12-24 months.

Joint ventures continue to be a popular part of a strategy for growth. Such a model for risk sharing might become more attractive during a period of uncertainty, potentially caused by the pandemic, technological disruption or geopolitical factors.

More businesses are looking at horizontal collaboration rather than to team with supply chains.

44% of respondents saw horizontal collaboration (rather than vertical or diagonal collaboration) as the space where joint ventures would play a part, reflecting perhaps defensive measures or routes to new markets. 

Most are seen as successful with little need to renegotiate terms.

Our survey found that joint ventures were perceived to be complex but if parties were suitably prepared, then respondents said that joint ventures delivered on their objectives. 78% of respondents assessed the success of their joint ventures being “as expected” or “better than expected”.

Early stage expectation setting is the biggest factor behind successful joint ventures.

A clear articulation of business objectives and imperatives is important to the success of a joint venture. 67% of respondents said that clearly addressing expectations at an early stage was a key reason for expectations being met.

More opportunities are seen globally than domestically.

77% of respondents envisage that their next joint venture will be international in nature, reflecting findings that the most important reason for entering into a joint venture was access to new markets.