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| 1 minute read

Why Joint Ventures Fail – And How to Prevent It

The statistics on JV performance are grim: Over 30% of JVs are terminated in the first five years; 49% fail to meet the strategic or financial objectives of at least one partner, and 67% struggle with partners misaligned on the annual needs of the business. It is why many executives joke that joint venture is a four-letter word. At Ankura, we have served hundreds of JVs and partnerships. We have conducted dozens of research studies on JV and partnership success – and – and have identified 10 common causes underlying the multitude of ways JVs implode. Some causes, like misalignment of corporate strategy or culture, are often visible to dealmakers at the front end of the deal. Others, like shifts in corporate circumstances or regulatory requirements that negatively impact the JV, or an inability to evolve the JV with the market are more common in middle age. For each ailment, we have identified steps that dealmakers, board directors, and JV CEOs can take to diagnose and treat ventures before they become another negative statistic.

© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.

Tags

joint ventures & partnerships, article, transactions, f-risk

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