Question

International Paper Company, MeadWestvaco, and Rubicon, Ltd. Work together and found ArborGen, a new biotechnology company that creates genetically modified trees. This is an example of a ______ because ArborGen is a new company, founded based on inputs from three other companies.

Answer 1

Answer: Joint venture

Explanation: A joint venture can be defined as a business entity, that is created by two or more firms by shared ownership or sharing in risk and returns. The joint venture is usually done by the firms for targeting new emerging markets to increase their customer base.

In the given case, Arboren is a new company and is formed by the joint ownership of three existing firms.

Hence, from the above we can conclude that this is an example of Joint venture.