The company has struck a deal with its second-biggest shareholder. — Reuters
SAO PAULO: Brazil’s JBS SA is moving closer to a long-awaited share listing in New York after a deal with its second-biggest shareholder.
The equity holding arm of Brazil’s state-owned lender BNDES, which owns almost 21% of JBS, will refrain from voting on the plan at the company’s upcoming board meeting, clearing the biggest hurdle for JBS’s listing, according to a regulatory filing.
The deal was reached with J&F Investimentos SA, which controls the world’s largest meat producer.
The unusual agreement calls for BNDESPar to receive as much as 500 million Brazilian reais (US$87.9mil) should JBS’ New York listing not bring the share appreciation expected, according to the filing.
The companies didn’t disclose what that strike price is but said it must be achieved in the second half of 2026.
JBS has argued its valuation is currently capped compared to its peers Tyson Foods Inc, Hormel Foods Corp and its US subsidiary Pilgrim’s Pride Corp because the company isn’t listed in the United States and can’t be part of indexes such as the Russell 2000 Index and the S&P 500.
The company previously said a New York Stock Exchange listing could boost its market value to US$30bil, up from about US$12bil now.
To be sure, there’s no guarantee a US listing would close the gap in valuations between JBS and its peers, as the agriculture market faces a downturn.
There is also the risk that president Donald Trump’s trade wars with China, Mexico and Canada could yet deepen that rout.
Rival Smithfield Foods Inc, the largest pork producer in the United States, saw its stock price fall below the range offered in its initial public offering earlier this year.
The company and an indirectly owned subsidiary of its backer, Hong Kong-listed WH Group Ltd, sold about 26 million shares to raise US$522mil.
JBS, controlled by Brazilian billionaire brothers Joesley and Wesley Batista, plans to refile its application with the US Securities and Exchange Commission after it posts earnings next week, according to people familiar with the matter.
That should pave the way for a listing by the end of the third quarter, the people said.
BNDESPar helped bankroll JBS’s global expansion in the past, including a series of acquisitions that cemented the company’s place at the top of the industry.
The bank invested 8.1 billion reais in the company, getting a return of roughly 22.7 billion reais discounting the investment.
JBS is a multinational conglomerate that is the largest meat processing entity in the world, producing factory processed beef, chicken, salmon, sheep, pork and also sells by-products from the processing of these meats. It was founded in 1953. — Bloomberg
