Dive Brief:
- JBS received approval from the U.S. Securities and Exchange Commission on Tuesday to list its shares on the New York Stock Exchange despite objections from environmental and congressional lawmakers.
- The SEC granted the world’s largest meat company a declaration of effectiveness, meaning it had no objections to Brazil-based JBS’ proposal for a U.S. listing. Shareholders will vote on the proposal at a May 23 meeting.
- JBS CEO Gilberto Tomazoni said in a statement that the listing would boost market valuation, plus “attract new investors and further strengthen our position as a global food industry leader.”
Dive Insight:
The SEC faced intense pressure to deny the world’s largest meat company from accessing the U.S. market due to its climate record and links to deforestation. Environmental groups argue a listing would allow JBS to increase its already vast carbon footprint.
JBS also has a history of misleading investors and consumers, critics argue, both on climate and corporate governance. The company was implicated in a corruption scandal that roiled Brazil’s political landscape. It also is facing a lawsuit in the U.S. for allegedly misleading consumers on its climate action plan.
“By almost every metric, a company like JBS has a detrimental impact on society,” Alexandria Reid, campaign lead at international NGO Global Witness, said in a statement. “Allowing it to list on the world’s largest stock exchange — unlocking vast opportunities for expansion and profit — shows the deep failures of the US financial regulatory system. This decision is a disaster for both people and the planet.”
JBS’ proposed listing also has sparked anticompetitive concerns among U.S. lawmakers.
Democratic lawmakers and former Florida Sen. Marco Rubio, now secretary of state under the Trump administration, told the SEC last year that JBS’ listing could strengthen the company’s market position and “further entrench its monopoly power.”
Mighty Earth, which has made five submissions to the SEC challenging the JBS listing, said in a statement that the agency’s decision shows it “is no longer the independent SEC that has upheld honest practices on American markets for nearly a century.”
“Given the company’s long rap sheet of illegal and corrupt conduct, it’s hard to see how the SEC could have confidence that JBS won’t deceive US investors,” Mighty Earth CEO Glenn Hurowitz said in a statement.
JBS has pursued a listing on U.S. stock markets for close to a decade, arguing that the move would unlock new capital and nearly double its market valuation to $30 billion, according to Bloomberg.
The COVID-19 pandemic, corruption scandals and other delays have stymied JBS from previously listing in the U.S. The company’s two largest shareholders — including one that rejected efforts to pursue a U.S. IPO in 2016 — will abstain from voting, removing one of the biggest potential hurdles facing the listing.
“Once completed, this step will mark a new chapter in JBS’s history — one with the potential to unlock shareholder value and broaden our investor base,” Guilherme Cavalcanti, JBS CFO, said in a statement.
JBS is seeking to seek shares through a parent company in the Netherlands, JBS NV. It also seeks a listing on the São Paulo Stock Exchange in Brazil. The meatpacker expects to start offering shares for the listing in early June, according to a filing to the SEC earlier this month.
