JBS inches closer to US listing as state shareholder abstains from key vote

By Ana Mano and Roberto Samora

SAO PAULO (Reuters) -The controlling shareholder of Brazilian meatpacking giant JBS and government investment vehicle BNDESPar, the second largest shareholder in JBS, have signed a deal that puts the company closer to listing its shares in both the United States and Brazil.

In a securities filing released on Monday, JBS said BNDESPar, which is the investment arm of Brazilian state development bank BNDES, agreed to abstain from voting at an upcoming meeting to discuss the proposed dual listing, leaving the final decision to other minority shareholders.

J&F Investimentos, a holding company run by JBS's founding Batista family, which is the company's controlling shareholder, will not have a right to vote on the proposal at the shareholders' meeting, said BNDESPar in a separate statement confirming the arrangement.

JBS is the world's biggest meatpacker.

Beginning in 2007, a buying spree backed by BNDES transformed the meatpacker into a globe-spanning empire controlling brands like Swift and processors like Pilgrim's Pride.

Brazil's government has previously trumpeted JBS as an example of an industrial policy to foster "national champions," and the company is considered one of BNDESPar's most successful investments.

BNDESPar owns nearly 21% of the meatpacker and said its stake in JBS will remain the same after the dual listing.

A person familiar with BNDESPar's planning said it does not have any obligation or deadline to sell its stake if the company effectively executes the dual listing plan.

As part of the deal with J&F, BNDESPar said it will have the right to receive a payment of up to 500 million reais ($88 million) if the price of JBS shares after the listing remains below a certain level during the second half of 2026.

Neither BNDESPar nor JBS disclosed the price level.

A person close to the situation said JBS is looking to secure approval for the dual listing by the end of this year from the U.S. Securities and Exchange Commission.

JBS unveiled its dual listing proposal in July 2023, calling it "a transformative value proposition."

But its plans to list shares in New York have met opposition from U.S. politicians and environmental groups, which raised concerns about greenwashing and previous corruption accusations involving its founders.

If JBS's proposed dual listing is approved, the controlling and minority shareholders will hold shares in JBS N.V., a company based in the Netherlands.

BNDESPar said it has invested approximately 8.1 billion reais ($1.42 billion) in JBS and has already received 4.9 billion reais in dividends. Its total estimated gain from the JBS investment reached 22.7 billion reais as of December 31, 2024, equivalent to an 11.35% internal rate of return, the firm said.

($1 = 5.6861 reais)

(Reporting by Ana Mano and Roberto Samora; Editing by David Alire Garcia and Leslie Adler)