Unlocking International Joint Ventures

CHAPTER FIVEGOOD PROCESS ATTRIBUTES:WHAT INDICATES A NEGOTIATION IS LIKELY TO CONCLUDE SUCCESSFULLY?

‘If there is negotiation, it must be rooted in mutual respect and concern for the rights of others.’

– John F. Kennedy

Based on a mix of experience and academic research we believe there are a number of key attributes which indicate the negotiations are likely to successfully end in the formation of an IJV.

There are caveats. Academic research is a bit tricky. No-one tells a researcher when they are working on an IJV. Accordingly, academic research is based purely on IJVs that have been successfully formed. This creates an unintentional bias in the data as they can only study cases which are successful.

Experience of IJV professionals is likely to provide a more nuanced and accurate view. However, it is unfair to say far more nuanced and accurate than academic research because IJV professionals also only have exposure to a sliver of deals taking place and indeed many potential IJVs abort long before the first lawyer or consultant turns up. As the IJV professional is only likely to see half a dozen deals a year at best – so, while that adds up over time, it does not bode well for a large statistical study.

Based on our experience, it is likely that most IJV attempts abort – usually after a few meetings and the completion rate for IJVs is very low. However, it could be worse – many of those IJVs could have proceeded to completion when they really should not have. There are a ...