425: JBS Proposes Corporate Restructuring and Dual Listing on NYSE and B3

JBS S.A. announces a proposed corporate restructuring and dual listing, aiming to list JBS N.V. shares on the New York Stock Exchange (NYSE) and Brazilian Depositary Receipts (BDRs) on the São Paulo Stock Exchange (B3).

Summary

• JBS S.A. is proposing a corporate restructuring and dual listing.
• The plan involves listing JBS N.V. shares on the NYSE and BDRs on the B3.
• JBS N.V. will become the ultimate holding company of the JBS Group.
• The objective is to enhance the company's global presence, improve access to funding, and maximize shareholder value.
• The proposed transaction involves incorporating all JBS S.A. shares not held by JBS Participaes into JBS Participaes.
• Shareholders will receive one BDR for every two shares of JBS S.A.
• ADS holders will receive one Class A share for each ADS.
• A dividend of R$1.00 per share, totaling R$2,218,116,370.00, is proposed, contingent on the approval of the merger of shares.
• The EGM to vote on the dual listing is scheduled for May 23, 2025.
• JBS aims to join major American indices such as the Russell 3000, MSCI, and S&P 1500 after the transaction.

Sentiment

Score: 7

Explanation: The document presents a strategic move for JBS with potential benefits like increased access to capital and global visibility. While there are inherent risks and tax implications, the overall tone is positive and forward-looking.

Positives

• The dual listing aims to improve access to funding sources and lower the cost of capital.
• The restructuring is not expected to reduce the economic participation of shareholders.
• JBS will remain listed in Brazil via BDRs on B3, allowing Brazilian investors to participate in JBS's growth.
• The current operational structure of JBS will be maintained in its existing locations.
• The Netherlands offers political and financial stability, a well-developed legal regime, and a strong tax policy.
• Listing on the NYSE aims to attract investors dedicated to investing according to major stock indexes.
• The proposed dividend may serve as a source of funds necessary to pay any taxes that may be due by the shareholders as a result of the Dual Listing.

Negatives

• The Merger of Shares may trigger the recognition of capital gain subject to taxation in Brazil.
• Non-Resident Shareholders may have income tax withholding (IRRF) applied to any eventual capital gain recognized in the Merger of Shares.
• The Merger of Shares and Redemption together generally are expected to be treated as a taxable transaction for U.S. federal income tax purposes.
• JBS S.A. shares will no longer be listed on B3 or any other exchange, and the JBS S.A. ADS program will be terminated.

Risks

• The completion of the Proposed Transaction is subject to shareholder and regulatory approvals.
• Unforeseen liabilities, future capital expenditures, and economic performance could affect the JBS Group.
• The anticipated timing and benefits of the Proposed Transaction are subject to uncertainty.
• There is a risk of business disruption, operational problems, and financial loss.
• The dates provided are estimates and subject to change due to events beyond JBS's control.

Future Outlook

JBS expects the dual listing to improve access to funding sources, enhance the ability to raise financing, and lower the cost of capital. The company aims to join major American indices such as the Russell 3000, MSCI, and S&P 1500.

Management Comments

• JBS's global CEO, Gilberto Tomazoni, will continue leading the Company's operations from the JBS office in So Paulo.
• The global CFO, Guilherme Cavalcanti, will also keep working from the JBS office in So Paulo.

Industry Context

Dual listings are often pursued by companies seeking to tap into larger pools of capital and increase their visibility among international investors. Listing on the NYSE, the world's largest stock exchange by market capitalization, can significantly enhance a company's profile and attract a broader investor base.

Comparison to Industry Standards

• Other global food companies like Tyson Foods (TSN) and Hormel Foods (HRL) are listed on the NYSE, providing JBS with a benchmark for investor expectations and valuation.
• The dual listing structure is similar to that of other Brazilian companies that have listed ADRs (American Depositary Receipts) on the NYSE while maintaining a local listing on the B3, such as Vale (VALE) and Petrobras (PBR).
• The choice of the Netherlands as the domicile for JBS N.V. is consistent with other multinational corporations seeking a favorable regulatory and tax environment, similar to how ArcelorMittal (MT) is domiciled in Luxembourg.

Stakeholder Impact

• Shareholders will receive BDRs or Class A Shares in exchange for their JBS S.A. shares or ADSs.
• Employees are not expected to be affected, as the current operational structure will be maintained.
• The dual listing aims to enhance the company's global presence and improve access to funding, potentially benefiting all stakeholders.
• The proposed dividend will provide a return to shareholders, contingent on the approval of the merger of shares.

Next Steps

• Shareholders will vote on the proposed transaction at the Extraordinary General Meeting (EGM) on May 23, 2025.
• JBS N.V. Class A Common Shares must be approved for listing on the NYSE.
• JBS N.V. BDRs must be approved by the CVM and for listing on B3.
• If approved, JBS S.A. shareholders will receive JBS N.V. BDRs or Class A Shares.
• The dividend will be paid on a date to be announced by the Company's management.

Key Dates

Keywords

Dual Listing, JBS, NYSE, B3, Restructuring, BDRs, Shareholders, ADS, Dividend, EGM