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The Independent
23-05-2025
- Business
- The Independent
JBS shareholders approve US stock listing despite pushback from environmental groups and others
Brazilian meat giant JBS came a step closer Friday to its long-held goal of trading its shares on the New York Stock Exchange. The company's minority shareholders voted to approve JBS's plan to list its shares both in Sao Paulo and New York, casting aside opposition from environmental groups, U.S. lawmakers and others who noted JBS' record of corruption, monopolistic behavior and environmental destruction. JBS said the outcome showed shareholders were confident in the benefits a dual listing would bring. "This step is expected to further unlock value for JBS, providing broader access to investors and more competitive interest rates, thereby expanding our ability to finance growth at a lower cost and accelerating our diversification strategy,' JBS Global Chief Financial Officer Guilherme Cavalcanti said in a statement. JBS said it expected to begin trading on the NYSE on June 12. The U.S. Securities and Exchange Commission granted the company's request to list its shares in New York late last month. JBS is one of the world's largest food companies, with more than 250 production facilities in 17 countries. Half of its annual revenue comes from the U.S., where it has more than 72,000 employees. It's America's top beef producer and it's second-largest producer of poultry and pork. JBS has pushed for several years to have its stock traded in New York and received significant pushback. Mighty Earth, an environmental group, said Friday that activists and political pressure had long kept the meat processor from making an initial public offering in the U.S. 'Giving JBS access to billions of dollars of new funding will serve only to supercharge deforestation and its climate-wrecking operations," Mighty Earth CEO Glenn Hurowitz said in a statement. 'Listing on the NYSE is meant to be a signal to investors that a company is serious about transparency, but JBS has shown its only playbook is hiding the true scale of its destruction, climate emissions and human rights abuses.' A message seeking comment was left Friday with the NYSE. Glass Lewis, an influential independent investor advisory firm, was also among those recommending that shareholders reject the plan. In its report, Glass Lewis said the recent return of brothers Joesley and Wesley Batista to the JBS board should concern investors. The brothers, who are the sons of JBS' founder, were briefly jailed in Brazil in 2017 on bribery and corruption charges. 'In our view, the involvement of the company and of Joesley and Wesley Batista in multiple high-profile scandals has tarnished the company's reputation, undermining stakeholder trust and posing a significant risk to its competitive position,' Glass Lewis said. Glass Lewis also objected to the company's plan for dual share classes, which would give the Batistas and other controlling shareholders more voting power. In its response to Glass Lewis' report, JBS said it has established more stringent controls and anti-corruption training at the company in recent years. It also said a U.S. listing would ensure more oversight from U.S. authorities. '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 said in a statement last month when the company announced Friday's vote. Many U.S. lawmakers also aren't convinced JBS belongs on the NYSE. In a letter sent last week to JBS, U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, noted that Pilgrim's Pride — a U.S. company owned by JBS — was the largest single donor to President Donald Trump's inaugural committee, with a $5 million gift. The SEC's approval came just weeks after that donation, Warren said. 'I am concerned Pilgrim's Pride may have made its contribution to the inaugural fund to curry favor with the Trump administration,' Warren wrote in the letter, which asked the company why the donation was made. In a statement, JBS said it has a 'long bipartisan history of participating in the civic process.' Warren was also among a bipartisan group of 15 U.S. senators who sent a letter to the SEC in January 2024 urging the agency to reject a U.S. listing for JBS. The senators, a diverse group that rarely agrees on policy, included Republicans Marco Rubio of Florida and Josh Hawley of Missouri, Democrat Cory Booker of New Jersey and Independent Bernie Sanders of Vermont. The letter noted that in 2020, J&F Investments, a controlling shareholder of JBS that is owned by the Batista family, pleaded guilty to bribery charges in U.S. federal court and agreed to pay fines of $256 million. It also said Pilgrim's Pride pleaded guilty to price-fixing charges in 2021. And it said U.S. Senate investigations found that JBS is 'turning a blind eye' to rainforest destruction in the Amazon by its suppliers. 'Approval of JBS' proposed listing would subject U.S. investors to risk from a company with a history of blatant, systemic corruption, and further entrench its monopoly power and embolden its monopoly practices,' the letter said.
Reuters
14-05-2025
- Business
- Reuters
Brazil's JBS defends dual listing proposal following criticism, shares fall
SAO PAULO, May 14 (Reuters) - Brazilian meatpacker JBS SA ( opens new tab defended the structure of a proposed dual listing that will go to shareholders for approval this month, saying on Wednesday that the plan is an attractive value proposition to investors in the long term. If approved by minority shareholders on May 23, the plan - originally announced in 2023 - would see the world's biggest meat company primarily listed in New York with Brazilian depositary receipts traded in Sao Paulo. The Institutional Shareholder Services (ISS), an advisory firm for matters of corporate governance, has argued the proposal could potentially weaken minority shareholders' rights. In a call with analysts to discuss first-quarter results, JBS' Chief Financial Officer Guilherme Cavalcanti addressed that criticism, saying the proposed structure ensures the company will retain a strong controlling shareholder that fully understands the sector. "In our industry, it is very important that you have defined control," he said. "And control defined by people who understand the business, who have a track record ... This is the best format." JBS posted strong quarterly results on Tuesday in a seasonally weaker quarter of the year. However, executives acknowledged on Wednesday that 2025 would be "more challenging" than 2024, citing a tight U.S. cattle cycle and uncertainty related to global tariffs, which could hurt its meat exports out of the United States to China. JBS shares fell nearly 6%, following the call with analysts. JBS' current controlling shareholder is the Batista family's J&F investment group. In a letter sent to shareholders obtained by Reuters, JBS criticized ISS's position on the dual listing. "ISS clearly fails to recognize the long-term commitment and strategic importance of the controlling shareholder's role and contribution in achieving JBS' leadership in the global food industry," it wrote. JBS NV, the Dutch company created for the dual listing, will issue Class A and Class B shares. Under the proposed structure, the Class B shares will have 10 times the voting power of Class A shares, and only Class A shares will be publicly traded. In one potential scenario, JBS' controlling shareholders could end up with 85% of voting power. Goldman Sachs wrote this week that JBS competitor Tyson Foods (TSN.N), opens new tab also offers different share classes and said that rivals including Marfrig ( opens new tab, BRF ( opens new tab and Minerva ( opens new tab "have a clear controlling shareholder." All shareholders will be able to convert Class A into Class B shares, Cavalcanti told the analysts. In private talks with investors, Cavalcanti said JBS managers have been urging all the company's shareholders to back the dual listing proposal, but he added that he could not predict the vote's outcome. JBS recently received a green-light from the U.S. Securities and Exchange Commission to go ahead with the plan, meaning its shares could start trading in New York next month. Should the plan be rejected by the minority shareholders, however, it would need to file for a new SEC approval, a process that would take three to six months to complete, Cavalcanti said.
