![]() ![]() For this purpose, it can invest with the supplier to develop and maintain the capacity of such production and avoid the uncertainty arising due to unavailability of this input material. This is done when one of the entities produces a particular kind of good for which it needs a raw material of specialized nature. Vertical Joint VentureĪs in the vertical M&A, the Joint venture is between two business entities in the same supply chain. For example, if a company has owned fleet of transport while another has extra storage space, both can help each other out in inventory management and save each other’s costs of having individual fleets or storage spaces and use them in their idle time. ![]() This is a format in which both the companies come together because each has expertise in one or the other business functions and therefore they wish to create a symbiotic environment for each other and benefit from the synergies so developed. Recently, in Feb 2020, Trilogy metal and South 32 completed a joint venture in Vancouver, and formed the company Ambler metals LLC, with the purpose of advancement of Arctic & Bornite projects & exploration of the Ambler mining district. Once the project is completed, the Joint Venture comes to an end. Key characteristic is that the purpose is defined and limited to the completion of the single project as per the agreement of the venture. It could be created for purposes like creating a toll road or an office complex and so on. This is the most common form of joint venture. Joint venture is a separate legal entity and therefore enjoys all the benefits of a company such as acquiring assets in its own name, limited liability and so on.At times the government also enters into joint ventures with corporate entities for their skill and expertise.However, there can be a totally new company created for a new business project to be undertaken by the coventurers. ![]() ![]()
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