Corporate Finance Training Courses from Roger Baden-Powell

The course focuses on the nature, structure and objectives of joint ventures and strategic alliances and highlights the requirements for effective corporate partnership.

You will learn to assess whether a proposed joint venture is likely to be the most effective means of promoting a company’s activities into new markets, product lines or services.

Emphasis is placed upon the identification of a suitable partner and upon the establishment of a workable structure, an effective management and an efficient exit route.

The legal framework and related tax consequences of particular types of joint venture and strategic alliance are also outlined within the overall context of an essentially practical course.

The Nature of Corporate Partnering

• Optimum Structure – single or multi-party JV or strategic alliance (with or without equity)
• Realistic Agreement – think for both sides and plan for divorce from day one
• Specific Objectives – promoting internal change, speed to market, accelerating growth
• Senior Partners, Junior Partners or Equal Partners – advantages & disadvantages for each

Selecting an Appropriate Partner

• Motivation – entry to foreign markets, matching resources, supply chain management
• Acquisition vs. Alliance – revolution vs. evolution, likely success
• Clarification of Expectations – business plan, alliance strategy, SWOT analysis
• Overall Corporate Objectives – developing a group-wide alliance strategy
• Risk Analysis – relationship & performance risks, political & resource risks

Effective Negotiations

• Cultural issues – open, honest & polite vs. sharp, devious & heavy-handed
• Compromise, Pressure & Conflict – how does a prospective partner react?
• A JV is not an Acquisition – the result is very different from a Sale & Purchase Agreement
• Common Law and Civil Law – practice is converging but important differences remain
• Prohibitions or Financial Penalties? – how best to regulate on-going joint activities
• Traps to Avoid – inappropriate partner, unsuitable structure, changing circumstances

Choice of Structure

• Strategic or Transactional – agree the specific objectives, abandon pre-conceived ideas
• Contractual Joint Ventures – simpler, cheaper, most tax efficient?
• Corporate Joint Ventures – advantages, disadvantages, tax considerations
• Dual Headed Structures – combined group, separate entity or twinned share
• Loose Strategic Alliances – good fences make good neighbours
• Partnerships – general partnership, limited partnership, limited liability partnership
• EEIG – operating rules prevent profits
• Societas Europaea – rules governed by the lowest common denominator

Managing a Joint Venture

• Pre-Nuptial Agreement – marry in haste; repent at leisure
• Preserve Corporate Secrets – avoid low level migration of confidential information
• Avoid Dependency – a JV partner is an ally; not a friend
• Avoid Educating a Competitor – an ally may become an enemy on termination of the JV
• Avoid Conflict – identify and remove any sand in the machine before commencement
• Essential Management Qualities – flexibility, team players, good at crisis management
• Control Systems – procedures should cater for both senior and junior partners
• Use of Committees – project management, liaison and working committees
• Minority Protection – use of a shareholders’ agreement to entrench minority rights

Termination

• Exit Planning – include termination procedures in the initial agreement: four flavours
• Friendly – “We agreed that our relationship should end if this happened”
• Default – “We can’t go on like this”
• Mutually Assured Destruction – “We failed to meet our objectives. It’s all over”
• Russian Roulette or Mexican Shoot-Out – “Get me out of here”
• Picking Up the Bits – who keeps what and are there any continuing obligations?
• Future Operations – embed JVs as a core competence by learning from past mistakes