Joint-Ventures need flexibility.

What makes long-lasting joint-ventures? A well-designed shareholders' agreement is one of the keys to success. It needs to be at the same time precise and flexible. Precise to build a strong governance. Flexible, and agile, to allow space for changing circumstances.

This is what I am teaching to HEC Paris students. This year the students had the opportunity to experience it through a special case study that I created for them, from a real shareholders' agreement that I customized.

Using a bit of my own creativity, this agreement between a French and a Chinese company, was renamed “Celeste China”, a joint-venture between “Petit Zéphir” and “Babar Group”.

The exchange was extremely lively and interesting. The students were able to digest quickly the 60 pages of contract, and identify the scope and the structure of the joint-venture. We discussed in-depth the exit clause (lock-up, sale to 3rd party, tag-along, put and call options ...) and even had a strategic conversation on the risks that can appear over the lifetime of the joint-venture.

Most of the students were not French, and almost half of them Chinese. So, in additionto learning the "hard skills" of governance and corporate finance, the students discovered the poetry of one of the most beautiful French children’s book “The story of Babar”.

#jointventures #governance #agility #strategy #corporatefinance #HECParis