Joint ventures

A joint venture (JV) is formed when two or more distinct firms combine a portion of their resources to form a separate, jointly-owned entity. Joint ventures differ from mergers and acquisitions. Companies may pursue joint ventures for multiple reasons: to access a new market, particularly an emerging market; to gain scale efficiencies by combining assets and operations; to share risk for major investments or projects; or to access skills and capabilities. In several countries, infrastructure development is carried out jointly by the government and private businesses through public-private partnerships, often as joint ventures. Most joint ventures are incorporated, although some, as in the oil and gas industry, are "unincorporated" joint ventures that mimic a corporate entity. For individuals, when two or more persons come together to form a temporary partnership to carry out a particular project, such a partnership is also called a joint venture, in which the parties are co-venturers. A joint venture can take various forms, depending on the intention of the co-venturing firms or individuals. It can also take the form of a project or asset JV created to pursue a specific project, as an "industry utility" that provides a narrow set of services to industry participants, or as an organization for defining industry standards.