425: JBS Eyes Dual Listing on NYSE and B3 to Unlock Value and Expand Global Reach

JBS S.A. is pursuing a corporate restructuring and dual listing on the New York Stock Exchange (NYSE) and the So Paulo Stock Exchange (B3) to enhance its global presence and unlock shareholder value.

Summary

• JBS S.A. is planning a corporate restructuring and dual listing, with JBS N.V. becoming the ultimate holding company.
• The aim is to list JBS N.V.'s Class A common shares on the NYSE and Brazilian Depositary Receipts (BDRs) on the B3.
• A registration statement on Form F-4 has been filed with the SEC.
• The proposed transaction involves a merger of shares, a cash dividend, and redemption of redeemable shares.
• JBS S.A. shareholders will receive one JBS N.V. BDR for every redeemable share held.
• The dual listing structure involves J&F and FIP Formosa transferring JBS S.A. Common Shares to Brazil HoldCo in exchange for newly-issued shares of BrazilCo.
• JBS N.V. will become the indirect Controlling Shareholder of JBS S.A.
• The company aims to unlock untapped potential, lower the cost of capital, expand access to a broader investor base, and become eligible for inclusion in prominent equity indexes.
• JBS has pledged to zero the balance of its greenhouse gas emissions by 2040.
• The Extraordinary General Meeting (EGM) is scheduled for May 23, 2025, to vote on the merger of shares, delisting from the B3, and a cash dividend.

Sentiment

Score: 7

Explanation: The document presents a positive outlook on JBS's future prospects with the dual listing, highlighting potential benefits such as increased access to capital, a broader investor base, and improved governance. However, it also acknowledges risks and uncertainties associated with forward-looking statements.

Positives

• The dual listing is expected to unlock untapped potential and maximize value for JBS shareholders.
• It aims to lower the overall cost of capital associated with equity and debt financing.
• The move will expand access to a broader and more diverse investor base.
• JBS may become eligible for inclusion in prominent equity indexes such as S&P, MSCI, and Russell.
• The company has a long-term value proposition of continuous growth, value-added products and brands, profitability, and financial discipline.
• JBS has pledged to zero the balance of its greenhouse gas emissions by 2040.

Negatives

• The document contains forward-looking statements that are subject to uncertainty and changes in circumstances.
• Actual results could differ materially from these forward-looking statements due to various risks and uncertainties.
• The company acknowledges that unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

Risks

• Risks relating to the completion of the Proposed Transaction on anticipated terms and timing, including obtaining shareholder and regulatory approvals.
• Anticipated tax treatment and unforeseen liabilities.
• Future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, and future prospects.
• Business and management strategies for the management and expansion and growth of the JBS Groups operations.
• Potential business disruption, operational problems, financial loss, and legal liability to third parties.

Future Outlook

The company expects the dual listing to improve its rating indices and maximize shareholder value. JBS is estimating an expansion Capex of US$ 1 billion and maintenance Capex in the same amount for 2025.

Management Comments

• The U.S. listing is a Strategic Objective for JBS, As It: Broadens our access to Global Capital Markets, lowering overall cost of capital associated with equity and debt financing.
• Increases our Global visibility with prominent equity indexes, moving closer to key international investors.
• Strengthens our Global leadership by enhancing our sustainable growth capabilities and long-lasting value creation to shareholders.
• Consolidates our Governance by abiding to stricter SEC rules beyond local benchmarks.

Industry Context

The dual listing aims to position JBS among global peers with better access to capital markets and a broader investor base, aligning with industry trends of globalization and increased focus on shareholder value.

Comparison to Industry Standards

• The document compares JBS's credit spread to that of Tyson Foods (TSN), indicating a potential re-rating at U.S. peer valuation levels.
• It also presents a comparison of financial metrics such as Return on Invested Capital (ROIC), Market Cap, Dividend Yield, and EV/EBITDA with industry peers.
• The document highlights the potential for inclusion in U.S. equity indexes, such as the S&P 500, MSCI US All Cap Index, and Russell 3000, which would increase visibility and attract passive investment.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased value and access to global capital markets.
• Employees: No immediate impact expected, but potential for long-term growth and stability.
• Customers: No immediate impact expected.
• Suppliers: No immediate impact expected.
• Creditors: Potential for lower cost of capital and improved financial stability.

Next Steps

• Approval of the proposed transaction at the Extraordinary General Meeting (EGM) on May 23, 2025.
• Delisting from the B3.
• Listing of JBS N.V. Class A Common Shares on the NYSE and JBS N.V. BDRs on the B3.
• Exchange of JBS S.A. ADSs for JBS N.V. Class A Common Shares.
• Potential inclusion in U.S. equity indexes.

Key Dates

Keywords

dual listing, JBS, NYSE, B3, corporate restructuring, shareholder value, financial performance, global expansion, EGM, BDRs