JBS Approves U.S. Listing Amid Global Expansion and Environmental Concerns

Global Meat Processor JBS Secures Shareholder Approval for U.S. Listing

Following a contentious process, JBS, the world’s largest meat processor, has secured shareholder approval for its U.S. stock listing. This move marks a pivotal moment in the company’s global expansion, driven by the vision of Brazilian billionaire brothers Wesley and Joesley Batista, who transformed their family slaughterhouse into a multinational agribusiness giant.

Strategic Move to Boost Share Value and Access Funding

The decision to transfer JBS’s primary stock trading venue to the U.S. aims to increase the company’s share value, which currently trades at a discount compared to American rivals. By listing in New York, JBS seeks to tap into cheaper funding sources, enabling further expansion and growth.

Historical Growth and Diversification

Since its founding in 1953, JBS has evolved from a Brazilian beef supplier into a diversified food conglomerate. The company now operates in poultry, pork, fish, plant-based alternatives, and eggs, with net sales reaching $77 billion in 2024. This expansion mirrors Brazil’s rise as a global leader in agribusiness.

Shareholder Dynamics and Governance Challenges

While minority shareholders and Brazil’s state development bank BNDES abstained from the vote, the decision rested with outside investors who own about one-third of the company. Early partial results indicated a slim majority opposed the plans, but the final outcome was in favor of the dual listing.

Corporate Structure and Voting Power

Under the new structure, a Netherlands-based company will issue class A and B shares. Class B shares carry 10 times the voting power but are not traded on exchanges. This structure allows the Batistas, who hold 48% of the equity, to potentially control up to 85% of voting rights, reinforcing their influence over the company.

CEO’s Perspective on the Decision

Chief Executive Gilberto Tomazoni emphasized that the approval reflects shareholder confidence in the benefits of the dual listing. He stated, “The outcome of the meeting demonstrates that shareholders are confident in the benefits that will arise from the dual listing and the alignment of the corporate structure with the company’s global and diversified profile.”

Analyst Insights and Market Outlook

Analyst Daniel Biolsi of Hedgeye Risk Management noted that the approval was expected, as shareholders seek higher valuations for the stock. He anticipates that JBS shares will likely narrow the gap compared to U.S. rivals like Tyson, Hormel, and Smithfield, though a full parity may take time.

Environmental Concerns and Corporate Responsibility

Environmentalists have raised concerns about JBS’s role in deforestation and climate change, citing its links to cattle ranching in the Amazon. Glenn Hurowitz of Mighty Earth warned that access to new funding could exacerbate these issues. However, JBS claims to ban the purchase of animals from farms with deforestation, forced labor, or other questionable practices, with monitoring across its supply chains.

Conclusion

JBS’s U.S. listing represents a significant step in its global strategy, balancing growth ambitions with environmental stewardship. The company’s future will depend on its ability to navigate these challenges while maintaining its position as a leader in the meat processing industry.