As companies realign their priorities to better reflect economic realities, joint ventures appear to be a popular area of focus. Over the past few weeks, we've seen a number of companies delay, restructure or abandon JVs altogether.
The most high profile in the group is Kuwait Petrochemical Industries Co., which decided to pullout of its planned
$19 billion venture with Dow Chemical Co. They're joined by
Sony Corp. and Sharp Corp, which have bumped back the start of their LCD flat panel JV to March 2009;
SanDisk Corp. and Toshiba Corp., which have restructured their Flash manufacturing JV; and bankrupt poultry producer Pilgrim's Pride Corp., which wants to
sell its stake in a grain elevator JV to partner Archer Daniels Midland Co.
Of course, other corporates are creating JVs to help raise desperately needed cash. High on that list has got to be
Citigroup Inc., which is planning to merge its brokerage unit with Morgan Stanley. Entering a JV when one or both partners are in a weakened state is risky. That companies are doing it anyway is another indicator of just how difficult the economic environment has become.
- Suzanne Stevens
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