JOINT VENTURE-

In a joint venture, two or more firms join their hands to form a separate, independent
organization for strategic purposes. Such partnerships are typically focused on specific
market objective. As part of JV agreement, ownership, operational responsibilities and
financial rewards and risks are allocated to each participant. Each partner in the JV
retains its own corporate identity and independence. JVs may run from a few months to
few years or life long.

In a joint venture, both parties are equally invested in the project in terms of money,
time, and effort to build on the original concept. While joint ventures are generally small
projects, major corporations also use this method in order to diversify. A joint venture
can ensure the success of smaller projects for those that are just starting in the business
world or for established corporations. Since the cost of starting new projects is generally
high, a joint venture allows both parties to share the burden of the project, as well as the
resulting profits.

Reasons behind Joint Ventures-

 Pooling of Complementary Resources
 Access to Raw Materials
 Access to New Markets
 Diversification of Risks
 Economies of Scale
 Cost Reduction
 Tax Shelter
 Equity Partnerships

Key Issues-
 Management Issues
 Financing Issues
 Issues Regarding Transfer of Shares
 Issues Related to Termination
 Contingency Issues
 Commercial Issues
Advantages-
 Provide companies with the opportunity to gain new capacity and expertise

 Allow companies to enter related businesses or new geographic markets or gain

new technological knowledge

 Access to greater resources, including specialized staff and technology

 Sharing of risks with a venture partner

 Joint ventures can be flexible. For example, a joint venture can have a limited life
span and only cover part of what you do, thus limiting both your commitment and
the business' exposure.

 In the era of divestiture and consolidation, JV’s offer a creative way for
companies to exit from non-core businesses.

 Companies can gradually separate a business from the rest of the organisation,
and eventually, sell it to the other parent company. Roughly 80% of all joint
ventures end in a sale by one partner to the other.

Disadvantages -
 It takes time and effort to build the right relationship and partnering with another
business can be challenging. Problems are likely to arise if:

 The objectives of the venture are not 100 per cent clear and communicated to
everyone involved.

 There is an imbalance in levels of expertise, investment or assets brought into the

venture by the different partners.

 Different cultures and management styles result in poor integration and co-
operation.

 The partners don't provide enough leadership and support in the early stages.

 Success in a joint venture depends on thorough research and analysis of the

objectives.
 EXAMPLES

1. Nokia Siemens Networks-

PROMOTOR COMPANIES
NOKIA
Nokia has played a pioneering role in the growth of cellular technology in India, starting
with the first-ever cellular call a decade ago, made on a Nokia mobile phone over a
Nokia-deployed network.
Nokia started its India operations in 1995, and presently operates out of offices in New
Delhi, Mumbai, Kolkata, Jaipur, Lucknow, Chennai, Bangalore, Pune and Ahmedabad.
The Indian operations comprise of the handsets business; R&D facilities in Bangalore
and Mumbai; a manufacturing plant in Chennai and a Design Studio in Bangalore.
Over the years, the company has grown manifold with its manpower strength increasing
from 450 people in the year 2004 to over 15000 employees in March 2008 (including
Nokia Siemens Networks). Today, India holds the distinction of being the second largest
market for the company globally.

SIEMENS-
The history of Siemens in India dates back to 1867, when Werner von Siemens
personally supervised the laying of the first telegraphic line between London and
Calcutta. The first company office was founded in 1922 and subsequently, in 1957,
Siemens was incorporated as a company under the Indian Companies Act. Today, the
company has a nation-wide sales and service network, 19 manufacturing plants, and a
network of around 500 distribution partner.

For more than 50 years, Siemens has been active in India, where it holds leading
positions in the Energy, Industry and Healthcare Sectors, while Siemens IT Solutions and
Services operates across all three Sectors.
Siemens currently has about 16,800 employees in India. In fiscal 2009 (October 1, 2008 –
September 30, 2009), sales to customers in India amounted to almost EUR 1.7 billion.
New orders totaled EUR 2.3 billion.

Nokia Siemens Joint Venture

Nokia Siemens Networks is one of the largest telecommunications equipment suppliers in
the world. Nokia Siemens Networks was created as the result of a joint venture between
Siemens's COM division (minus its Enterprise business unit) and Nokia's Network
Business Group.
The new company was announced on 19 June 2006. Nokia Siemens Networks was
officially launched at the 3GSM World Congress in Barcelona in February 2007. Nokia
Siemens Networks then began full operations on 1 April 2007 and has its headquarters in
Espoo, Greater Helsinki, Finland, while the West-South Europe headquarters and three of
its five divisions are based in Munich, Germany. Nokia Siemens Networks has operations
in some 150 countries serving over 600 customers.
On 19th of July 2010, the company acquired the wireless-network equipment division of
Motorola, to be completed by the end of the year.

Nokia Siemens Networks operates in approximately 200 countries worldwide, and has
about 60,000 employees. Most of those employees work in one of the five central hubs
around the world, including: Espoo and Tampere in Finland, Munich in Germany, Delhi
and Bangalore in India, Guangdong in China and Lisbon in Portugal. Its major
manufacturing sites are in Chennai in India, China, Espoo in Finland, Germany and
Poland. More than 1 billion people are connected through its networks. The customer
base of Nokia Siemens Networks includes 1,400 customers in 150 countries (including
more than 600 operator customers). Combined 2009 revenues exceed € 12.5 billion,
making the company one of the largest telecommunication equipment makers in the
world.
Products/Services-
Customer care support
* Device management
* Fixed-mobile convergence
* Hosting
* Integrated provisioning
* Inventory management
* IPTV
* Mobile backhaul
* Mobile TV
* Outsourcing
* Unified charging and billing
* WCDMA frequency reframing solution

Solutions for public and corporate

* Air and maritime solutions

* Government solutions
* Railway solutions
* More about public and corporate solutions
Effects-

 In January 2008 Nokia Siemens Networks acquired Israeli company Atrica, a

company that builds carrier-class Ethernet transport systems for metro
networks. The official release did not disclose terms, however they are thought
to be in the region of $100 million.
 In February 2008 Nokia Siemens Networks acquired Apertio, Bristol UK-
based, a mobile network customer management tools provider for €140 million.
With this acquisition Nokia Siemens Networks gained customers in the
subscriber management area including Orange, T-Mobile, O2 and Vodafone.
 Following the outcome of the auction for the CDMA and Long Term Evolution
(LTE) assets of Nortel, Nokia Siemens Networks remains focused on
maintaining its leadership in the global wireless infrastructure industry and
sustaining its recent momentum in the North American market.
 In July 2010, Nokia Siemens Networks voiced its intentions to acquire the
wireless-network equipment division of Motorola.

Success-

 Over 120 real time customer monitoring and analysis cases

 1 in new generation Subscriber Data Management with 1.2 billion subscribers
globally; a leader in HLRs;
 1 in device management
 5 out of the top 10 CSP groups buy our business and process consulting services
 2 in Service Delivery Framework with 55+ projects & MMSC with
 80 installations worldwide
 90+ browsing and WAP installations with highest capacities over
 17,000 requests per second
 800 Systems integration projects globally
 1 in fixed and mobile NGN voice solutions, connecting one-fourth of the Earth’s
population with our voice solutions
 More than 200 security projects

Article-
Nokia and Siemens announce joint venture
Guardian, Monday 19 June 2006
The telecoms equipment sector today took a further step towards consolidation as Nokia
and Siemens agreed to combine their mobile and fixed-line phone network equipment
businesses.
The joint venture, to be called Nokia Siemens Networks, will have annual revenues of
€15.8bn and compete with the industry leader, Cisco Systems, and the newly merged
Alcatel-Lucent.
Finland's Nokia and Germany's Siemens said they expected to make savings of €1.5bn
(£1.025bn) annually by 2010. They also expect to cut 10 to 15% of the combined
businesses' 60,000 staff over the next four years.
"This joint venture is an important step to strengthen our position in the market
sustainably and to enable us to offer the best state-of-the-art converged technologies and
services to our customers," said Klaus Kleinfeld, the chief executive of Siemens.
Nokia Siemens Networks will have its headquarters in Finland and be led by Simon
Beresford-Wylie, currently in charge of Nokia's networks division. The new company
will also have a regional headquarters in Munich.
"The communications industry is converging, and a strong and independent Nokia
Siemens Networks will be ideally positioned to help customers lower costs and grow
revenue while managing the challenges of converging technology," said Nokia's Olli-
Pekka Kallasvuo, who will serve as chairman of the new firm.
Analysts said pulling off the merger would be tricky.
"I like the idea but I think it's risky. On the wireless side Nokia is sub-scale and putting
them together will help," Richard Windsor of Normura told Reuters.
"But in wireline (fixed-line) Nokia has no business whatsoever and it's now being tasked
with turning around a business that Siemens failed to do over the last six years. I don't
say they can't do it, but it will be tricky."
Paul MacGregor, UK managing director of the global project management consultancy
PIPC, said: "This will be an expensive and risky merger and tough for management to get
real value out of the business in what is an increasingly competitive space."
"In the short term, shareholders could suffer as this is a long-haul deal where all the
benefits seem to centre on economies of scale and hitting the rapidly converging fixed
and wireless markets."
This is the second big joint venture in the telecoms equipment sector this year.

2. NTPC BHEL Power Projects Private Limited (NBPPL)

PROMOTOR COMPANIES
NTPC Limited
NTPC, India's largest power company with an installed capacity of 30644 MW is
presently operating 15 coal based, 7 gas based power stations and 4 joint ventures.
NTPC contributed nearly one-third of the country's entire power generation during the
year 2008-09 and plans to become a 75,000 MW power company by 2017. NTPC has
moved ahead by diversifying its portfolio to emerge as an integrated power major with
presence across the entire energy value chain. NTPC has been allocated 6 coal mine
blocks which are expected to produce 48 million tons per annum.NTPC has also
ventured into oil & gas exploration.

With ample opportunities to grow, NTPC has been ranked as one of the great places of
work in India by independent surveys.
NTPC is a premier power generation company in India having expertise and strength in
areas such as setting up of coal, gas and hydro based power projects, operation and
maintenance of power stations and sale of power to various State power utilities and
other bulk customers. NTPC has developed comprehensive in-house expertise in various
facets of power generation from concept to commissioning, efficient operation to
nurturing of ecology and environment in accordance with National Power Policy of the
Government of India.

BHEL
BHEL is the largest engineering and manufacturing enterprise in India in the
energy-related/infrastructure sector, today. BHEL was established more than 40 years
ago, ushering in the indigenous Heavy Electrical Equipment industry in India - a dream
that has been more than realized with a well-recognized track record of performance.
The company has been earning profits continuously since 1971-72 and paying dividends
since 1976-77.

BHEL manufactures over 180 products under 30 major product groups and caters
to core sectors of the Indian Economy viz., Power Generation & Transmission, Industry,
Transportation, Renewable Energy, etc.
BHEL has acquired certifications to Quality Management Systems (ISO 9001),
Environmental Management Systems (ISO 14001) and Occupational Health & Safety
Management Systems (OHSAS 18001) and is also well on its journey towards Total
Quality Management.
BHEL's operations are organized around three business sectors, namely Power,
Industry - including Transmission, Transportation and Renewable Energy - and
Overseas Business.

NTPC and BHEL Navaratna enterprises of the Government of India have come together
to harness their compatibility, common ownership, and also common legacy for the
development of Power Sector as whole. The two companies have complementary
strengths, BHEL’s strength in being strong in Project and Product Engineering,
manufacturing and Erection and commissioning and NTPC strength in being Project
development & management. NBPPL is created to leverage the core strengths &
synergies of the respective promoter companies and supplement their EPC and equipment
manufacturing capacities. This will help to meet the huge emerging demand for setting up
of new power projects in the country.
Joint Venture-
NTPC BHEL Power Projects Private Limited (NBPPL) is a Joint Venture company of NTPC and BHEL,
both Navaratna, public sector companies of Government of India. The company was registered on
28.4.2008 under the Indian Companies Act 1956.

Financial Structure
(a) Share Participation
By NTPC and BHEL on 50:50 basis.

(b) Authorised Share Capital

Authorised Share Capital of the Joint Venture Company is Rs. 300 crore.

(c) Paid-up Capital

The Board of NTPC and BHEL have already approved capital investment of Rs. 100
crore each. However, for the present, the Paid Up Capital is Rs. 50 crore (Rs. 25 crore
each).

BUSINESS OBJECTIVE-

 The prime objective of the Company is to enhance the capability and capacity of
the Power Sector and supplement the efforts of both the promoter companies
(NTPC and BHEL ).

 To explore, secure and execute EPC contract(s) for Power Plants and other
Infrastructure Projects in India and abroad including plant engineering, project
management, quality assurance, quality control, procurement, logistics, site
management, erection and commissioning services.

 And to engage in manufacturing and supply of equipments for power plants and
other infrastructure projects in India and abroad
Product And Services
The following business segments shall be priority:

1. EPC Contracts of Power Plants of any ratings

2. BOP Contracts of Power plants of any ratings
3. Sourcing and Manufacturing of BOP™ 's
4. Project management activities of Power Plant on behalf of customer
5. Quality control & inspection of jobs ordered by customer on any manufacturer
6. Consultancy services related to installations of Power plant
7. Executions of any infrastructure activity
8. Supply of spares, overhauling and other after sales service related to power plants.
ARTICLE-
PM to lay foundation stone for NTPC-BHEL project Wednesday
2010-08-29 ,Sify finance
Prime Minister Manmohan Singh will lay the foundation stones for the NTPC-BHEL
joint venture power plant manufacturing project and the Tirupati International Airport
during his one-day visit to Andhra Pradesh's Chittoor district Wednesday.
The NTPC-BHEL project, which is coming up at Mannavaram village near Srikalahasthi,
involves an investment of Rs.6,000 crore and proposes to provide direct employment to
6,000 people and indirect employment to 25,000-30,000 people.
The prime minister's visit to lay the foundation stones for the two projects was put off
several times during the last one year.
The death of then chief minister Y.S. Rajasekhara Reddy in a helicopter crash in
September last year and the subsequent developments forced Manmohan Singh to
postpone his visits.
Chief Minister K. Rosaiah Sunday reviewed with senior officials the arrangements for the
visit.
Rosaiah said NTPC-BHEL Power Projects Private Limited (NBPPL), a joint venture
between National Thermal Power Corporation Limited (NRPC) and Bharat Heavy
Electricals Ltd (BHEL), would establish a Greenfield industry for manufacturing power
plant equipment.
The chief minister hoped that the NTPC-BHEL joint venture project would be completed
by 2013-14.
It will be the largest public sector investment project in the state after the Vizag steel
plant in 1979.

3 Bharti AXA General Insurance Company Ltd

Bharti
Founded in 1976, by Sunil Bharti Mittal, Bharti has grown from being a manufacturer of
bicycle parts to one of the largest and most respected business groups in India. With its
entrepreneurial spirit and passion to undertake business projects that are transformational
in nature, Bharti has created world-class businesses in telecom, financial services, retail,
and foods.

Bharti started its telecom services business by launching mobile services in Delhi (India)
in 1995. Since then there has been no looking back and Bharti Airtel, the group's' flagship
company, has emerged as one of the top telecom companies in the world and is amongst
the top five wireless operators in the world.
Through its global telecom operations Bharti group has presence in 21 countries across
Asia, Africa and Europe - India, Sri Lanka, Bangladesh, Jersey, Guernsey, Seychelles,
Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana,
Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda, and
Zambia.

Over the past few years, the group has diversified into emerging business areas in the fast
expanding Indian economy. With a vision to build India's finest conglomerate by 2020 the
group has forayed into the retail sector by opening retail stores in multiple formats - small
and medium - as well establishing large scale cash & carry stores to serve institutional
customers and other retailers. The group offers a complete portfolio of financial services -
life insurance, general insurance and asset management - to customers across India.
Bharti also serves customers through its fresh and processed foods business. The group
has growing interests in other areas such as telecom software, real estate, training and
capacity building, and distribution of telecom/IT products.

Bharti strongly believes in giving back to the society and through its philanthropic arm
the Bharti Foundation it is reaching out to over 30,000 underprivileged children and
youth in India.

AXA
AXA (Euronext: CS, Pink Sheets: AXAHY) is a French global insurance group
headquartered in the 8th arrondissement of Paris. AXA is a conglomerate of
independently run business, operated according to the laws and regulations of many
different countries.
The AXA groups of companies are engaged in life, health and other forms of insurance,
as well as investment management. The AXA group operates primarily in Western
Europe, North America and the Asia Pacific region and the Middle East.
The AXA Group encompasses five operating business segments: Life & Savings,
Property & Casualty, International Insurance (including reinsurance), Asset Management
and Other Financial Services.
AXA ranks as the 9th largest company in the world (based on revenue) on the 2010
Fortune Global 500 list.
AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse
geographically, with major operations in Europe, North America and the Asia/Pacific
area. For full year 2008, IFRS revenues amounted to Euro 91.2 billion and IFRS adjusted
earnings to Euro 3.7 billion. AXA had Euro 981 billion in assets under management as of
December 31, 2008
Bharti AXA General Insurance Company Ltd

Bharti AXA General Insurance Co. Ltd. is a joint venture between Bharti, one
of India’s leading business groups with interests in Telecom, Agri Business and Retail;
and AXA, world leader in Financial Protection and Wealth Management. Bharti Group
holds 74% of equity and AXA holds 26% of the equity.
The company was incorporated on 13th July 2007 with its headquarters at Bangalore. The
company currently has 40 branches across India.

Bharti AXA presents an array of insurance policies and products to suit an individual’s
customized requirements. These embody the commitment to the company’s system of
values as follows:

a) Reliable – prompt settlements, customer service and professionalism.

b) Attentive – to customer needs as they change with time, and actively listening to
customers.

c) Available – easy customer access to money and to the company, and plans that have
built-in flexibility and convenience.

Products and Services

Health is not only , but ill-health seriously depletes your wealth too. A comprehensive
Health Insurance Policy proves to be a survival aid - as this policy from Bharti AXA will
prove.

Smart Health Insurance Policy

Smart Health Essential Insurance Policy

Smart Health Critical Illness Insurance Policy

Smart Health Deductibles Insurance Policy

Strategy:
Quality Policy – To provide fast, fair and friendly service to customers & partners
To achieve a leadership position in India through a multi-distribution, multi-product
platform
To adapt AXA’s best practice blueprints as a sound platform for profitable
growth
To leverage Bharti’s local knowledge, infrastructure and customer base
To deliver high levels of shareholder return
To build long term value with our business partners by enhancing the proposition to their
customers
To be the employer of choice to attract and retain the best talent in India
Strong distribution network & customer base of Bharti – provides access to customer
base of more than 60 million

News paper Article

Irda gives green signal for Bharti-AXA life insurance

10 Jul, 2006, Economic Times
PUNE/MUMBAI: Competition is hotting up in the life insurance segment, with
the entry of more private players. Insurance Regulatory Development Authority (Irda)
has given telecom major Bharti Enterprises the go-ahead to enter the life insurance
business partnering French major AXA.

The regulator’s clearance comes close to one year after the agreement was inked
between the two partners. Bharti will hold 74% stake, while AXA will hold 26% stake
in the joint venture.

Bharti will be the second telecom company after Reliance to foray into the insurance
business. However, both Reliance Life Insurance and Reliance General Insurance do not
have a foreign equity partner. Currently, the foreign equity stake in domestic insurance
companies is capped at 26%.

“We have cleared Bharti Enterprises’ application for a licence to enter into the life
insurance business partnering AXA,” CS Rao, chairman, Irda, told ET. The JV company
has earmarked Rs 500-crore investment for a period of 3-4 years. Bharti expects to
encash on its telecom customer base to sell insurance products.

Irda is also vetting state-owned Punjab National Bank’s (PNB) application for a licence
to foray into the life insurance business. US-based Principal Financial Group will hold a
26% stake in this four-way equity tie-up with PNB, Vijaya Bank and Berger Paints.
PNB and Vijaya Bank will hold 30% stake each. The balance will be held by Berger
Paints.
According to PNB executive director K Raghuraman, the new company will focus
mainly on the group life insurance segment. He said that presentations were made
recently to Irda. The JV is expected to commence business with a paid-up capital of Rs
110 crore. PNB already has ongoing ventures with the Principal Group, Vijaya Bank and
Berger Paints.

Some of the other groups exploring the possibility of entry into the insurance business
are Pune-based Kirloskars who are in talks with a few foreign players. The Finolex
group and Bharat Forge are also looking for opportunities in terms of partnerships.

Right now, there are 15 players in the life insurance segment — state-owned LIC and 14
private players. Bharti AXA Life Insurance Company will be the sixteenth player. For
private players, opportunities in this segment are reckoned to be huge as 80% of the
population is without life insurance coverage.

As part of the comprehensive changes to the insurance law, Irda has mooted varying the
percentage of foreign participation in the paid-up capital of an Indian insurance
company depending on the category of the
company. The regulator has also made out a case for separately defining a health
insurance company to enable the formation of a health insurance company.

Domestic insurance companies will need capital infusion to sustain their growth. Capital
is an issue because it takes nearly 6-7 years to break even in the industry.