Driving a Digital Future: Volkswagen Financial Services-J.P. Morgan Joint Venture Shapes Future of e-Payments

THE CHALLENGE:

In every aspect of our lives, including payment for products and services, consumers increasingly expect a convenient, hassle-free experience.

With that in mind, Volkswagen Financial Services spent years designing and refining a digital payments platform specifically to serve the needs of auto industry consumers, distributors and suppliers. It seamlessly handles payments from the initial purchase and leasing to parking, fueling and in-vehicle entertainment purchases.

To expand this sophisticated e-payments platform into other industries, German-based Volkswagen Financial Services sought a joint venture with global banking giant J.P. Morgan.

OUR OBJECTIVE:

A German McDermott team led by Clemens Just, with significant contributions from Isabelle Mueller, navigated across time zones and cultural nuances in negotiating terms for the joint venture with J.P. Morgan’s US-based team and their external lawyers. They emphasized respect and collaboration, not confrontation, to facilitate a seamless transaction and preserve a good working relationship between Volkswagen Financial Services and J.P. Morgan.

THE OUTCOME:

Fueled by a cross-practice, cross-border effort, the deal successfully closed after more than 18 months of drafting documents, negotiating terms and securing regulatory and antitrust approvals in multiple jurisdictions—including Luxembourg’s Commission de Surveillance du Secteur Financier, the German Ministry of Economics and Technology and antitrust authorities.

The joint venture represents a victory for both parties: Volkswagen Financial Services’ existing platform gives J.P. Morgan a strong starting point for accelerating its digital payments capabilities and entering the automotive industry. And with a nearly 75% majority stake in the company, J.P. Morgan will use its considerable industry know-how, regulatory support and other resources to help grow the Volkswagen platform and enter new markets.

Through previous work with Volkswagen Financial Services and other clients, the McDermott team came into the deal process with a strong understanding of the industry and market conditions. Their direct, pragmatic approach to the joint venture and focus on clear, frequent communication and building trust with J.P. Morgan’s representation helped drive the successful outcome.

GO FURTHER:

McDermott’s international footprint equipped the team to deliver timely legal advice and business-focused solutions from dedicated US and German offices across practices, including high-octane corporate, commercial, IP, data protection, regulatory and antitrust groups. A team leader serving as Volkswagen’s single point of contact coordinated efforts with more than a dozen lawyers throughout the process, handling a variety of legal and cultural complexities, anticipating roadblocks and taking the deal across the finish line.

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