The Batista Family’s J&F investments and BNDESPar, the other major holder of JBS SA capital, have agreed to let only minority stockholders decide whether to list JBS shares on the New York and São Paulo stock markets.
The two-year-old JBS dual listing plan will be voted on at an Extraordinary General Meeting on May 23. JBS, the world’s largest producer of meat, has completed the registration process with the U.S. Securities and Exchange Commission (SEC). The transaction is also subject to the approval of Brazil’s securities regulator (CVM).
The dual listing would see JBS shares traded on the New York Stock Exchange (NYSE) and B3, the Brazilian stock exchange.
JBS has opted to give its minority shareholders full decision-making power. The majority shareholders, who include the controversial Bastisa brothers, will abstain from voting.
“Once completed, this step will mark a new chapter in JBS’s history — one with the potential to unlock shareholder value and broaden our investor base,” said Guilherme Cavalcanti, JBS’s CFO. “If shareholders approve, the company expects to begin offering shares in the U.S. market as early as June of this year. “Once completed, this step will mark a new chapter in JBS’s history — one with the potential to unlock shareholder value and broaden our investor base”.
“We believe this transaction will increase our visibility in global markets, attract new investors, and further strengthen our position as a global food industry leader,” Tomazoni added.
JBS SA entered the U.S. market in 2007 with the $1.5 billion purchase of Swift & Company, making it the largest beef processor in the world. JBS USA is headquartered in Greeley, CO. JBS production facilities are found in 17 countries worldwide.
JBS has been criticized for the dual listing plan because of the Batista brothers’ past criminal activities and the company’s environmental record. However, it remains an economic powerhouse. It is investing $100 million in Vietnam and Texas, with $50 million going to Colorado. Its net income for the first quarter was up 78 percent, at $520.7 million.
Wesley and Joesley Batista are from the JBS founding family, which started as a small butchery in regional Brazil in 1953 by José Batista Sobrinho, a rancher in Anápolis. It has been acquiring other meat companies since 1968. The Batista brothers, through J&F Investments, are the controlling JBS shareholders.
The SEC and the U.S. Justice Department fined JBS $280 million, mainly for the Brazilian bribery scheme that led to its acquisition of Pilgrim’s Pride.
Since it entered the U.S. market and established JBS USA in 2007, JBS proceeded to:
- Purchase the American beef and pork processing company, Swift Foods Co.
- Acquire the beef processing operations of Smithfield Foods.
- Took over Pilgrim’s Pride.
- Purchase Cargill’s pork processing operations in 2015.
In 2017, J&F Investments reached a settlement to pay a $3.2 billion fine for its role in an expansive bribery scandal in Brazil. The Batista brothers admitted bribing everyone from front-line meat inspectors to Brazil’s president. Later, the brothers were jailed for a short time, but were still worth $6 billion when they emerged.
Upon achieving the dual listing, JBS plans to move its world headquarters to the Netherlands for some significant tax breaks.
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