Establishing a joint venture

A client with international operations was struggling to make progress with establishing a new joint venture (JV). Oaklin was engaged to assist in setting up the new entity and to oversee any commercial and legal agreements required.

Several challenges were identified early on. Among these, buy-in for the JVs shareholder agreement had stalled due to conflicting motivating factors, and disagreement was present regarding the proposed operational design of the new entity. Further operational challenges were also foreseen due to the need to reduce upfront capital expenditure in order to reduce the investment risk.

In order to drive alignment for the shareholder agreement Oaklin began by clarifying the motivating factors for each party, de-personalising any points of contention, and holding the collective accountable for the planning of the revised agreement. It was identified early on that the timeline to launch the JV would ultimately be driven by establishing shareholder alignment, rather than the operational aspects of the JV.

In parallel, Oaklin led the design and implementation of end-to-end commercial and operational models for the new entity. This was conducted across multiple cross border sites and included a range of key technology selections to support the business. This also included creating an operating model that incorporated the best ways of working from each of the funding businesses.

Throughout establishment of the JV only the absolutely necessary elements of the new operating model was established. The strategy behind this was to minimise upfront capital expenditure to reduce the risk of investment. The plan moving forward was that all processes and technology would be improved and revised over time as the JV grew and evolved.