Joint Venture (JV)

An agreement of firms or individuals to jointly undertake a specific business project usually under the auspices of an SPV. Joint ventures can range from merger-like arrangements to cooperation in particular areas such as R&D, production, or distribution. Full-function joint ventures are ones in which the SPV is able to operate independently from the parent companies, because they contain all of the key business components such as marketing, distribution, etc. Joint ventures may raise issues under Competition Law, in particular JVs between competitors or potential competitors. The latter, especially if they are full function, may be treated as concentrations (i.e., akin to mergers).

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