Joint Venture Exit Clauses（一）.docVIP

Joint Venture Exit Clauses Venturing OutWhen partnerships sink, companies with solid exit strategies can avoid major grief.US Airways was shocked when British Airways--its partner in a critical transatlantic joint-service arrangement-- created a second major alliance with US Airways rival American Airlines. Having given up its own U.K. routes when it signed on with British Airways three years earlier, Arlington, Virginia-based US Airways had to patch together an alternative strategy after breaking off the partnership. It quickly began seeking permission to serve London again on its own. A similar jolt hit Murray Hill, New Jersey based Lucent Technologies Inc. last year, when a promising venture with Dutch giant Philips Electronics NV failed to take the U.S. digital mobile-phone market by storm, as the partners had expected it would. Pulling the plug on the 18-month-old pact left Lucent with large write- offs, bad PR from the finger-pointing that had gone on between the companies, and a hasty decision to abandon the domestic digital-phone business altogether. Call it the Titanic syndrome. Optimistic executives launch a joint venture and view their carefully crafted enterprise as unsinkable, then give little thought to such uncomfortable details as how many lifeboats to take along, or what course to set if they survive an iceberg hit. Whats needed is a formal exit strategy, envisioning various possibilities for a rational, perhaps even profitable, divorce. Companies with experience in planning for a joint ventures end recommend careful analysis of alternative valuation scenarios, lots of contingency planning--and making the finance chief master of the cold, hard realities. Business leaders sometimes fall victim to the enthusiasm of euphoria, says Robert Agate, the recently retired CFO of Colgate-Palmolive Co., who arranged numerous global alliances during his 35-year tenure (9 as CFO) at the New Yorkbased consumer-products concern. Part of the problem, he sugg