Shares of JBS, the renowned Brazilian meat corporation, experienced a 3.9% decline as they commenced trading on the New York Stock Exchange this past Friday. The listing in New York marks the realization of a significant aspiration for JBS, a company with a rich history spanning over 72 years, which has grown to become a major player in the global meat industry. Known for dominating the U.S market, JBS derives nearly half of its annual revenue from the United States and employs over 72,000 people in the country. It is the leading beef producer in the U.S., as well as ranking second in poultry and pork production.
Last month, the company’s minority shareholders voted in favor of listing JBS shares on both the Sao Paulo and New York exchanges, despite facing criticism from environmental advocates and U.S. legislators. These critics cited JBS’s past involvements in corruption, alleged monopolistic tactics, and charges of contributing to environmental degradation. Nevertheless, JBS has argued that dual listing presents opportunities for greater investor access and competitive borrowing rates, thereby facilitating the company’s growth plans. A U.S. listing would also mean increased regulatory oversight, something the company acknowledges its readiness for. The U.S. Securities and Exchange Commission had greenlighted JBS’s listing plans last month.
Yet, the initiative to enter the New York Stock Exchange has been met with resistance. Earlier in the week, the environmental organization Mighty Earth urged the NYSE board to reject the listing, claiming JBS profits unlawfully from lands deforested in Brazil. Additionally, Glass Lewis, an influential firm providing independent advice to investors, recommended that shareholders oppose the listing proposal. In its report, Glass Lewis expressed concern over the return of Joesley and Wesley Batista to the board, given their history of arrest on bribery and corruption charges in 2017. The firm was particularly critical of JBS’s plan to implement dual share classes, which potentially increase voting power for the Batista family and other major shareholders.
Despite these challenges, JBS expressed that the voting outcome reflected shareholders’ faith in the potential advantages dual listing might offer. The story has since been corrected to clarify that shares saw a decline on their debut, addressing an earlier error suggesting they had posted gains.