The Brazilian meat processing giant JBS moved closer to achieving its long-standing ambition of trading on the New York Stock Exchange (NYSE) following a pivotal decision on Friday.
The company’s minority shareholders greenlit the proposal for a dual listing in Sao Paulo and New York despite strong opposition from environmental activists, U.S. politicians, and critics who have criticized JBS for its history of corruption, monopolistic practices, and environmental degradation.
Shareholders’ approval of the listing reflects their confidence in the potential benefits it brings, according to JBS. Guilherme Cavalcanti, JBS Global’s Chief Financial Officer, emphasized that the dual listing could significantly enhance the value of the company, broaden its investor base, and improve access to competitive interest rates. This could facilitate growth at a reduced cost while bolstering the company’s diversification strategies.
JBS aims to initiate trading on the NYSE by June 12, bolstered by the U.S. Securities and Exchange Commission’s recent acceptance of the company’s request for a New York listing.
As one of the globe’s largest food producers, JBS operates over 250 production sites across 17 countries, with half of its annual revenue emerging from the U.S. market, where its workforce exceeds 72,000 employees. JBS holds the position of the leading beef producer in the U.S. and ranks as the second-largest poultry and pork producer.
The proposal faced significant resistance, particularly from environmental group Mighty Earth which, on Friday, criticized the initiative. According to Glenn Hurowitz, the CEO of Mighty Earth, securing extensive funding through a U.S. listing would likely exacerbate deforestation and the company’s environmentally harmful activities. He expressed concerns over JBS’s transparency, suggesting the listing is a facade hiding its detrimental environmental impact and human rights issues.
Intercontinental Exchange, the NYSE’s parent company, chose not to comment on the development.
Glass Lewis, a key independent advisory firm for investors, advised shareholders to oppose the dual listing. Their analysis indicated that the return of Joesley and Wesley Batista to JBS’s board should sound alarm bells for investors. These brothers, successors to JBS’s founder, faced imprisonment in Brazil in 2017 over bribery and corruption charges.
Glass Lewis expressed that JBS’s involvement in high-profile scandals, linked to the Batista brothers, has tarnished the company’s reputation, eroding trust among stakeholders and endangering its competitive stance.
The advisory firm also criticized JBS’s dual share class plan, arguing it affords disproportionate voting power to the Batistas and other major shareholders.
In response, JBS stated that it has implemented more stringent anti-corruption measures and enhanced training programs. The company argues that U.S. market listing would ensure more regulatory scrutiny.
According to JBS executive Tomazoni, this strategic move will improve its global visibility, attract more investors, and reinforce its leadership status in the food industry, a sentiment he shared last month when announcing the shareholder vote.
Nevertheless, several U.S. lawmakers remain skeptical about JBS’s credentials for an NYSE listing. Massachusetts Senator Elizabeth Warren highlighted concerns surrounding a $5 million donation from Pilgrim’s Pride, a JBS-owned U.S. entity, to President Trump’s inaugural committee. She speculated this contribution was intended to curry favor with the administration, as the SEC’s approval followed shortly after.
In response, JBS emphasized its history of bipartisan engagement in political activities.
Senator Warren, along with a bipartisan group of 15 U.S. senators, urged the SEC to deny the listing request back in January 2024. This diverse coalition included Republicans Marco Rubio and Josh Hawley, Democrat Cory Booker, and Independent Bernie Sanders.
The senators’ joint letter referenced a 2020 case where J&F Investments, JBS’s controlling entity, owned by the Batista family, admitted to bribery charges in U.S. federal court, agreeing to a $256 million penalty. Furthermore, Pilgrim’s Pride acknowledged price-fixing charges in 2021, and Senate investigations revealed JBS’s indifference to rainforest destruction by its suppliers in the Amazon.
They argued that granting JBS the proposed listing could put U.S. investors at risk due to the company’s ongoing issues with systemic corruption and potentially expand its monopolistic influence.