Brazilian meatpacking giant JBS has secured approval from its minority shareholders to pursue a dual listing on both the São Paulo and New York Stock Exchanges. This decision marks a significant milestone for the company, which has faced numerous challenges over the past decade, including corruption scandals, environmental concerns, and governance issues.
The approval came during a shareholder assembly in São Paulo, where, despite initial indications that 52% of remote votes opposed the plan, the final tally favored the dual listing. The announcement led to a 2% increase in JBS shares, which have surged 37% since mid-March. Analysts attribute this positive market reaction to the potential for higher valuation and increased access to capital that a dual listing could provide.
However, the decision has not been without controversy. Environmental groups and U.S. politicians have voiced concerns over JBS's track record, particularly regarding deforestation in the Amazon and the company's previous involvement in corruption scandals. The reinstatement of Joesley and Wesley Batista—executives previously jailed for corruption—onto the company's board has further fueled criticism. Influential advisory firm Glass Lewis and multiple U.S. senators have expressed apprehension about the company's governance practices and potential environmental risks.
Despite these concerns, JBS argues that the U.S. listing will enhance transparency, improve oversight, and attract international investors. The company has taken steps to implement stricter anti-corruption controls and has committed to improving its environmental practices. Analysts highlight the potential for higher valuation, with Genial Investimentos forecasting that JBS's enterprise value could rise to 7.5 times EBITDA from the current 5.8x, suggesting a potential 29.3% share price appreciation.
The dual listing is expected to improve the company's visibility and credibility among international investors. It also reflects JBS's commitment to transparency and adherence to global regulatory standards. As JBS navigates the complexities of dual listing, it will need to manage compliance with multiple regulatory frameworks. The company's leadership has expressed confidence in their ability to meet these challenges and capitalize on the opportunities presented by expanded market presence.
While the dual listing presents significant opportunities for JBS in terms of capital access and market expansion, it also brings increased scrutiny and responsibility. The company's ability to address environmental concerns, uphold governance standards, and deliver on its commitments will be critical in determining the success of this strategic move. Stakeholders will be closely monitoring JBS's actions in the coming months as it embarks on this new chapter.