JOINT VENTURE

Joint Venture of VINCI Corporation

Executive Summary

Berjaya Corporation and VINCI Corporation agreed to consolidate all their aggregates, cement, concrete-to-use and asphalt in the United Kingdom, VINCI Corporation Aggregates, VINCI Corporation Cement UK and Concrete UK ("VINCI Corporation UK ") and Tarmac Limited ("Tarmac UK") in the year 2011. This agreement created a 50-50 joint venture and established a leading company of construction materials in the United Kingdom, including high quality assets based on the geographical complementarily of its facilities and operations, the jurisdiction of two experienced staff and a portfolio of brands and innovation. The combined revenues of these activities amounted to 1.8 billion pounds with a combined EBITDA of 210 million pounds. Before the merger, the companies thought they would be able to create significant synergies and recurrent over 60 million pounds per year. They assumed to generate an increase in operational performance, improved supply chain and deployment of value added products on a large area. However, they are facing problems in making the venture successful. The paper has a discussion on the consequences of the venture on the both, the companies and the surrounded market in a holistic context. In the end, the paper will discuss the risks and opportunities associated with the joint venture and also will provide some of the recommendations to cope up with those risks to make the joint venture successful.

Joint Venture of VINCI Corporation

Introduction

World leader in building materials, VINCI Corporation holds a leading position in each of its businesses: Cement, Aggregates & Concrete and Gypsum. With 76,000 employees in 78 countries, the Group achieved in 2010 a turnover of 16.2 billion Euros. Featuring the first research centre in the world of building materials, VINCI Corporation places innovation at the heart of its priorities, working for sustainable construction and architectural creativity.

The joint venture is an activity that takes place when two international companies established and make full use of the potential of each of the parties to in order to maximize the economic benefits its activities provides the economic effects on business. In joint venture enterprises gets foreign investments and in accordance with law that is defined as an enterprise with equity participation of domestic and foreign investors. An important feature of the joint venture includes the consideration of the presence among its participants, along with one national and one foreign investor.

The emergence and spread of joint ventures as a form of concerted action among two or more partners, work together to achieve a common goal, It facilitate the process of internationalization of the economy of various countries, this increase capital exports. Certain influence on the development of joint ventures provides integration trends in the area of specialization and cooperation. Joint ventures as one of the most promising organizational forms of management have proliferated in the 1970s and 80s in Western Europe and Asia, and later on this country emerged in the countries of Central and Eastern Europe.

Joint ventures have become a means of attracting foreign advanced technology and modern management ...