425: JBS Shareholders Approve Dual Listing on NYSE and B3, Paving Way for Corporate Restructuring

JBS S.A. shareholders have approved a significant corporate restructuring and dual listing plan, which will see JBS N.V. become the ultimate holding company with shares trading on the New York Stock Exchange and Brazilian Depositary Receipts on the B3.

Summary

• JBS S.A. shareholders and JBS Participações have approved a corporate restructuring and dual listing plan at their Extraordinary General Meetings held on May 23, 2025.
• The restructuring involves JBS N.V., a Dutch entity, becoming the ultimate holding company of the JBS Group.
• JBS N.V.'s Class A common shares are intended to be listed and traded on the New York Stock Exchange (NYSE).
• Brazilian Depositary Receipts (Level II BDRs) representing JBS N.V.'s Class A common shares will be listed and traded on the B3 S.A. – Brasil, Bolsa, Balcão (B3).
• Upon completion, JBS S.A. common shares will cease trading on B3's Novo Mercado listing segment.
• The transaction involves a merger of JBS S.A. shares by JBS Participações, with JBS S.A. shareholders receiving 1 mandatorily redeemable preferred share of JBS Participações for every 2 JBS S.A. common shares held.
• These redeemable shares will be immediately redeemed for 1 BDR (representing 1 JBS N.V. Class A Share) for each redeemable share.
• A cash dividend of R$1.00 per share, totaling R$2,218,116,370, was declared for shareholders on record as of May 23, 2025.
• The completion of the Dual Listing is subject to key conditions, including NYSE listing approval for Class A Shares and CVM/B3 approval for the Sponsored Level II BDR Program and JBS N.V.'s foreign issuer registration.
• A tentative schedule estimates the start of BDR trading on B3 by June 9, 2025, and Class A Shares trading on NYSE by June 12, 2025, with the cash dividend payment estimated for June 16, 2025.

Sentiment

Score: 7

Explanation: The sentiment is largely positive due to the successful shareholder approval of a significant strategic corporate restructuring and dual listing, which is expected to enhance market access and liquidity. The declaration of a cash dividend also adds a positive note. However, potential tax implications for shareholders and the possibility of increased controlling shareholder voting power introduce some minor negative aspects, preventing a higher score.

Positives

• The approval of the dual listing provides JBS with access to a broader investor base, potentially increasing liquidity and valuation.
• Listing on the NYSE enhances JBS's global profile and visibility among international investors.
• The corporate restructuring aims to streamline the holding structure with JBS N.V. as the ultimate parent.
• A cash dividend of R$1.00 per share, totaling R$2,218,116,370, provides immediate return to shareholders.
• The Form F-4 registration statement with the SEC has been declared effective, indicating progress in regulatory approvals.

Negatives

• The cessation of trading of JBS S.A. common shares on B3's Novo Mercado segment may impact some existing Brazilian investors who prefer direct ownership of the Brazilian entity.
• The capital structure of JBS N.V. will differ from JBS S.A., potentially increasing the voting power of controlling shareholders (J&F and FIP Formosa) compared to their current voting power in JBS S.A., depending on Class A to Class B share conversions.
• Shareholders may incur income tax and other taxes on capital gains resulting from the Dual Listing, with varying implications based on investor type and residency.
• Non-resident investors face potential withholding income tax (IRRF) on capital gains, with rates up to 25%, and must provide acquisition cost information to avoid default assumptions.

Risks

• Completion of the Dual Listing is subject to various factors beyond the company's control, including obtaining shareholder and regulatory approvals (NYSE listing, CVM/B3 BDR program approval, JBS N.V. foreign issuer registration).
• If completion conditions are not satisfied, the Dual Listing will not be carried out, and all related resolutions and acts will be null and void, reverting to the status quo ante.
• Forward-looking statements are subject to uncertainty and changes in circumstances, and actual results could differ materially due to risks such as anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies.
• Consequences of material differences in results compared to forward-looking statements could include business disruption, operational problems, financial loss, and legal liability to third parties, which could have a material adverse effect on the JBS Group's consolidated financial condition, results of operations, or liquidity.
• Tax implications for shareholders vary significantly and may result in income tax and other taxes on gains, requiring investors to consult their advisors and be liable for applicable taxes.

Future Outlook

The JBS Group anticipates that the proposed corporate restructuring and dual listing will enhance its global market presence and access to capital. The transaction is expected to be completed in the shortest term possible, with a tentative schedule outlining key milestones through mid-June 2025, including the start of BDR trading on B3 and Class A Shares trading on NYSE. The company expects to comply with ongoing disclosure requirements in Brazil as a foreign issuer.

Management Comments

• Guilherme Perboyre Cavalcanti, Investor Relations Officer, signed the Material Fact, indicating formal communication from management.
• The EGM approved the authorization for the management of the Company to take all necessary measures to implement the resolutions approved at the EGM, demonstrating management's mandate to proceed with the dual listing.

Industry Context

This dual listing initiative by JBS, a global leader in the food industry, reflects a broader trend among large multinational corporations, particularly those based in emerging markets, to seek listings in major global financial centers like New York. Such moves aim to improve access to deeper capital pools, enhance corporate visibility, and potentially achieve higher valuations by attracting a wider range of institutional investors. For the meat processing sector, a dual listing can provide strategic flexibility for future acquisitions and global expansion, aligning JBS more closely with its international operational footprint.

Comparison to Industry Standards

• While the document does not provide specific comparable companies or projects, dual listings are a common strategy for large, globally diversified companies to enhance liquidity and investor reach. Companies like Vale S.A. (Brazilian mining giant) and Petrobras (Brazilian oil and gas company) have long maintained dual listings (e.g., NYSE and B3) to tap into international capital markets.
• The proposed structure, with a Dutch holding company (JBS N.V.) and listings in both the US and Brazil, is a recognized approach for internationalizing corporate governance and capital structures, often seen in companies with significant global operations seeking a neutral jurisdiction for their ultimate parent entity.

Corporate Governance

Related Party Transactions

• The Controlling Shareholders Contributions involve J&F S.A. and FIP Formosa (indirectly held by J&F), which are related parties, contributing their JBS S.A. shares to JBS Participações, then to LuxCo, and finally to JBS N.V. This process is subject to the same exchange ratio as non-controlling shareholders.
• The Cash Dividend declared to JBS Participações will be fully transferred to the Controlling Shareholders (J&F and FIP Formosa).

Stakeholder Impact

• **Shareholders (JBS S.A. Brazilian)**: Will exchange their JBS S.A. shares for BDRs of JBS N.V., maintaining economic interest but shifting to a new holding structure. They will receive a R$1.00 per share cash dividend. They may face capital gains tax on the exchange.
• **Shareholders (ADR Holders)**: Will receive Class A Shares of JBS N.V. through cancellation of BDRs, maintaining economic interest. They will also receive the cash dividend.
• **Controlling Shareholders (J&F and FIP Formosa)**: Their voting power in JBS N.V. may increase compared to JBS S.A. due to the new capital structure, and they will receive the portion of the cash dividend transferred from JBS Participações.
• **Investors (Global)**: The dual listing on NYSE and B3 aims to broaden the investor base, potentially increasing liquidity and attracting more international capital.
• **Regulatory Bodies (SEC, CVM, B3)**: JBS N.V. will be subject to disclosure and regulatory compliance requirements in both the US (as a Foreign Private Issuer) and Brazil (as a foreign issuer with a Level II BDR program).

Next Steps

• JBS N.V. to obtain registration as a foreign issuer with the CVM and approval of the Sponsored Level II BDR Program by the CVM and admission for listing of the BDRs by B3 (expected by May 30, 2025).
• Approval of the Class A Shares for listing on the NYSE (expected by June 12, 2025).
• Completion of the Dual Listing, including the Merger of Shares and the Redemption (expected by June 6, 2025).
• Start of BDR trading on B3 (expected by June 9, 2025).
• Delivery of BDRs to shareholders (expected by June 11, 2025).
• Start of Class A Shares trading on NYSE (estimated by June 12, 2025).
• Payment of the Cash Dividend (estimated by June 16, 2025).
• Auction of fractional BDRs (on or after June 16, 2025).
• JBS S.A. will keep shareholders and the market informed of the Dual Listing progress.

Key Dates

Keywords

JBS, Dual Listing, NYSE, B3, Corporate Restructuring, SEC Filing, Brazilian Depositary Receipts, BDRs, JBS N.V., JBS S.A., Meat Processing, Food Industry, Global Listing, Shareholder Approval, Capital Markets, Foreign Private Issuer