Unlike a merger or acquisition, a joint venture is a temporary collaboration between companies that maintain their separate identity and existence. The companies will usually combine particular assets for a specific business purpose over a finite period of time.
Also, in a joint venture, the parties will usually share operational control and decision-making. The parties may form a separate joint venture company or partnership and contribute assets to it. Alternatively, the parties may enter into a contractual joint venture whereby no separate company is created but the parties form a strategic alliance and retain ownership and control of their respective assets.
In cross border M&A especially, a joint venture prior to an acquisition may make sense because it allows both sides to feel each other out and determine if a permanent deal makes sense.
A buyer can decide if entering a particular market makes sense from a regulatory or commercial basis or if this particular joint venture partner is the right target in terms of operations, culture and philosophy.
A seller can determine the abilities and resources of the buyer and by delivering on its joint venture obligations the seller can show its value and justify a better price.