December 10, 2018
Acquisitions and alliances require a certain level of investment, and that investment can be influenced by the amount of control a party wants over the assets in question. Alliances, joint ventures (JVs) and other strategic partnerships generally don’t grant the same level of control as M&A, but the tradeoff can be worth it if they achieve the desired access without greater investment.
These varying levels of control are important for companies to consider as they pursue inorganic growth; a company should be confident that an investment includes an appropriate level of control, based on the deal structure. Key questions about control include:
- What type of control do you need?
- Can resources be accessed and maximum value achieved without equity?
- How much time are you willing to invest – for a specific deal and others?
- How certain are the capabilities and markets?
- Can people and systems be aligned while keeping parties independent?
- Is the control choice out of your hands?
Companies also should be aware of how certain circumstances and attributes of their organizations can guide the degree of control in deal structures. In addition, the characteristics of some sectors and regulations around cross-border transactions can factor into the control conversation.
Read more about this part of the acquisition-alliance decision at Buy vs. Partner: Focus on control, part of the PwC Deals series, Buy vs. Partner: Deciding when M&A or an alliance is the right path for growth.