Why Joint Ventures Are Making a Comeback
Strategic partnerships and joint ventures are on the rise, giving companies a faster, lower-risk route to market.
In a deal environment shaped by higher financing costs, regulatory scrutiny and valuation friction, joint ventures (JVs) and contribution deals — flexible strategic partnerships that enable companies to accelerate growth, share risk and access new capabilities — are re-emerging as capital-efficient alternatives to traditional mergers and acquisitions (M&A). They can take the form of horizontal, vertical or functional collaborations depending on their objectives. Organizations of any size, from early-stage startups to global enterprises, can gain value from a well-structured JV.
According to Inside the Deal: Mastering M&A Negotiation, produced by SS&C Intralinks in collaboration with Reuters Events, dealmakers are increasingly leveraging these structures to rebalance deal economics and limit downside.
Capital efficiency matters again
Facing tighter credit, financing conditions and regulatory scrutiny, buyers are under pressure to meet higher return thresholds. In this environment, all-cash or highly leveraged acquisitions are harder to justify, even for well-capitalized corporates.
As Javier Enrile, head of M&A and corporate development at TIAA, explains: “One way that you can [create value] is by looking into more contribution-type transactions or joint ventures.”
JVs begin with the formation of a new, jointly owned entity, allowing partners to pursue a shared strategic objective without one party acquiring another. Contribution transactions are the mechanism that makes this possible. Instead of just paying cash, each partner contributes assets, businesses or capabilities to the new entity. By pooling expertise and resources, partners can limit upfront capital outlay while retaining exposure to future gains.
Strategic access over outright ownership
Many of today’s most attractive opportunities sit at the intersection of new markets, emerging technologies or closely related business lines — areas where outright ownership may not be necessary on day one.
JVs allow companies to test partnerships, enter new geographies or industries, and build scale. The report highlights how these deals are often used to unlock growth where execution risk is high or where regulatory and operational complexity makes a full acquisition less appealing.
Boston Consulting Group’s 2024 research supports the idea that dealmakers are viewing JVs more favorably: 92 percent of respondents in its Capturing the Value of Joint Ventures survey agreed that companies are getting at least as much value as they give in JV transactions — a sharp improvement from a decade ago. This change in perception signals growing confidence that these structures can deliver strategic and financial upside.
Complexity is the trade-off
Despite the clear economic and strategic benefits, executing JVs can be especially complex. Establishing governance, control rights, exit paths and valuations for both partners introduces negotiation layers that don’t exist in an acquisition.
“Now complexity is exponential, because you have to agree on the value of both companies,” Enrile cautions. The report also notes that misalignment around strategy remains one of the most common reasons JVs fail.
Still, dealmakers are becoming more willing to accept added complexity as the cost of getting transactions done. In a market where bespoke deal structures are becoming more common, bilateral and highly tailored negotiations are often the only viable path forward.
How dealmakers are unlocking value
The renewed interest in JVs reflects a broader recalibration driven by complexity and opportunity. As market conditions become more demanding and negotiations more exacting, dealmakers are reassessing how they structure deals, allocate risk, secure financing and capture value.
Technology is playing a critical role in driving collaborative processes and smarter decision-making. Platforms like DealCentre AITM are helping deal teams manage information flows, surface insights and maintain momentum throughout increasingly sophisticated transactions.
To learn more about how leading practitioners are applying winning strategies across the full deal lifecycle, read Inside the Deal: Mastering M&A Negotiation.