Unlocking International Joint Ventures

APPENDIX CILLUSTRATIVE PRINCIPLES DEVELOPED PRIOR TO FIRST NEGOTIATION MEETING

The illustrative principles need to be modified to fit your situation. The completed document should not be more than a few pages of bullet points. The example below is meant to provide a feel for the level of detail and topics discussed under each of the eight principles. Adding additional points / principles is expected depending on the specifics of the proposed IJV.

Partner A has identified a number of Key ‘Principles’ which should frame the IJV discussions. While there are material points to be negotiated, the broad outline is the manner in which Partner A proposes to move forward. Items in square brackets [] are for discussion/confirmation.

1. Scope of IJV
   • The IJV will be …
2. Business Size (Definition of Success)
   • Partner B, through its presence and relationships, …
   • The IJV will …
   • The IJV should exceed sales of [US$…] turnover business by [2022]. EBITDA margins should exceed …
   • A detailed business plan will be agreed prior to signing the JVC; a joint (Partner B and Partner A) financial model for the IJV will be developed.
3. Control
   • Initial appointments of key management roles will come from each of the partners, with the approval of the other IJV party. Initial appointment roles are likely to include: General Manager, Sales, Regulatory/Government Relations, CFO, and … This is to provide the transfer of expertise and knowledge of the partner companies – over time, most of these should be market ...