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

JBS S.A. is proposing a corporate restructuring and dual listing that would see JBS N.V. become the ultimate holding company, with shares trading on the NYSE and BDRs on the B3.

Summary

• JBS S.A. is proposing a corporate restructuring and dual listing.
• The proposal involves creating a new holding company, JBS N.V., incorporated in the Netherlands.
• JBS N.V.'s Class A common shares will be listed on the New York Stock Exchange (NYSE).
• Brazilian Depositary Receipts (BDRs) representing JBS N.V.'s Class A common shares will be listed on the São Paulo Stock Exchange (B3).
• The objective is to improve JBS's global presence, access to funding, and shareholder value.
• The proposed transaction will not result in a reduction of the economic participation of shareholders in the Company's share capital.
• The exchange ratio for JBS S.A. shareholders will be 2:1, meaning every two common shares of JBS S.A. will be converted into one BDR.
• For ADS holders, the exchange ratio will be 1:1, meaning each ADS will be converted into one Class A Share.
• A dividend of R$1.00 per share, totaling R$2,218,116,370.00, will be paid to shareholders as of the EGM date, contingent on approval of the merger.
• The Extraordinary General Meeting (EGM) to vote on the proposal is scheduled for May 23, 2025.
• Trading of JBS N.V. BDRs on B3 is expected to begin on June 9, 2025, and trading of Class A shares on the NYSE is expected to begin on June 12, 2025.

Sentiment

Score: 7

Explanation: The document outlines a strategic move for JBS to enhance its global presence and financial capabilities. The tone is generally positive, emphasizing the potential benefits of the dual listing. However, there are also mentions of potential tax implications and risks associated with the transaction, which temper the overall sentiment.

Positives

• The dual listing aims to improve JBS's global presence and access to funding sources.
• It is expected to enhance the company's ability to raise financing and lower its cost of capital.
• The proposal will not reduce the economic participation of shareholders.
• Shareholders will receive a dividend of R$1.00 per share if the proposal is approved.
• JBS N.V. aims to join major American indices such as the Russell 3000, MSCI, and S&P 1500.
• The current operational structure of JBS will be maintained in the locations where it operates.

Negatives

• The Merger of Shares may trigger the recognition of capital gain subject to taxation in Brazil.
• JBS S.A. shares will no longer be listed on B3 or any other exchange after the conclusion of the Dual Listing.
• 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 tax treatment may change.
• The Dual Listing is subject to events beyond JBS's control, which could change the tentative dates.

Future Outlook

JBS expects the dual listing to improve its access to funding sources, enhance its ability to raise financing, lower its cost of capital, and improve its ratings indices, ultimately maximizing shareholder value.

Management Comments

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

Industry Context

Dual listings are often pursued by companies seeking access to larger pools of capital and increased visibility in international markets. Listing on the NYSE, the world's largest stock exchange by market capitalization, can attract a broader range of investors, particularly those focused on North American markets.

Comparison to Industry Standards

• Many of JBS's main comparable companies are listed on the NYSE.
• Comparable companies listed in North America have a much greater investment capacity compared to those investing in comparable companies in Brazil.

Stakeholder Impact

• Shareholders of JBS S.A. will become shareholders of JBS N.V., with shares traded on the NYSE and BDRs on B3.
• The dual listing is expected to improve JBS's access to funding, potentially benefiting employees and other stakeholders through increased investment and growth.
• The current operational structure of JBS will be maintained in the locations where it operates, so there will be no impact to employees.

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 shall be approved for listing on the NYSE.
• JBS N.V. BDRs shall be approved by the CVM and for listing on B3.
• If approved, JBS S.A. shares will be migrated to JBS N.V., with BDRs trading on B3 and Class A shares on the NYSE.

Key Dates

Keywords

Dual Listing, JBS, NYSE, B3, Corporate Restructuring, BDR, Shareholders, ADS, Dividend