Dive Brief:
- JBS S.A. announced plans to list shares on the New York Stock Exchange in the U.S. through a parent company in the Netherlands, JBS NV. It also seeks a listing on the São Paulo Stock Exchange in Brazil. Both listings are expected by the end of 2023, JBS said.
- The meat giant’s global CEO Gilberto Tomazoni said in a press release that its decision to pursue a dual listing strategy in the two countries will help it diversify its portfolio into more value-added products, cut costs and drive revenue.
- Tomazoni said in the statement JBS’ current operational structure — including supply chains and assets — will not be impacted by the decision.
Dive Insight:
The highly-anticipated listing from the world’s biggest meatpacker — which saw roughly $77 billion in revenues in 2022 — caused its shares to jump 9% Wednesday.
JBS believes its strategy to debut on the two stock exchanges will attract a wider array of investors. In an SEC filing, the company said to support the listing plan it will offer investors a $454 million dividend, and said shareholders will vote on the proposal at a future meeting.
“Importantly, the proposal will provide flexibility to finance growth through the issuance of equity while reducing the cost of capital, allowing the company to compete on an equal footing with global peers,” JBS’ global CFO Guilherme Cavalcanti said in a statement.
The U.S. listing has been years in the making for JBS. After the meatpacker went public in São Paolo in 2007, it went on an acquisition spree in the U.S. and speculation about when it would list shares on another stock exchange has heated up over the years. Most recently, plans were postponed due in part to a 2017 corruption scandal in Brazil, and then again during the COVID-19 pandemic.
The proposed listings come at a difficult time for the meat industry. A tight supply of cattle, driven by droughts and high feed costs, has increased costs for producers in growing regions this year. The price of beef and veal increased 2.7% year-over-year in June, according to the U.S. Bureau of Labor Statistics’ latest Consumer Price Index released Wednesday. Other categories like fresh whole chicken and ham saw increases of 4.5% and 4.7%, respectively.
As JBS continues to deal with strained margins, it sees the dual listing strategy as a way to boost shares. The company’s current CEO Wesley Batista Filho, the grandson of the company’s founder, took over in April of this year.
On top of economic woes, the meat giant has faced criticism for its handling of labor and sustainability issues in recent months. Last month it agreed to comply with a National Advertising Review Board request to stop making “aspirational” claims about its goal to reach net zero emissions by 2040, after being accused of greenwashing by sustainability activists. The company also faced pushback for employing Packers Sanitation Services to clean its facilities after the company was fined for hiring child labor. JBS said it ended its contracts with the sanitation company earlier this year.
Nathan Owens contributed to this report.
