In a significant turn for the global meat industry, JBS S.A., based in São Paulo, Brazil, is poised to begin trading on the New York Stock Exchange (NYSE) on June 12. This significant dual listing, which also encompasses the Brazilian market, signals the company’s ambition to tap into increased liquidity and dollar flows, while aiming to solidify its status as the foremost leader in the animal protein sector.
As the world’s largest meat-processing company by sales volume, JBS currently boasts a market valuation of approximately $16 billion, alongside impressive revenues totaling $77.2 billion for the fiscal year 2024. In comparison, Tyson Foods, its U.S. counterpart, has a market capitalization of $19.8 billion, with revenues reported at $53.3 billion. This strategic move not only positions JBS for potential market expansion but also lays the groundwork for overtaking its American rival in terms of market capitalization.
Despite these optimistic financial indicators, the dual listing has ignited a heated debate regarding corporate governance and ethical practices within the company. Prominent figures, including U.S. Senator Elizabeth Warren, have raised alarms over JBS’s connections to political donations that supposedly facilitated the approval process for its NYSE listing. Warren pointed specifically to JBS’s $5 million contribution to the Trump-Vance Inaugural Committee, questioning the transparency of the dual listing strategy.
The concerns surrounding JBS are compounded by its troubled history, particularly that of its founders, Joesley and Wesley Batista. The Batista brothers, who are reportedly valued at approximately $5 billion each, faced significant legal challenges in 2017 when they were imprisoned in Brazil for half a year due to bribery charges, casting a long shadow over the company’s governance image.
Adding to the scrutiny on JBS is a statement from Glenn Hurowitz, CEO of the non-profit organization Mighty Earth, who highlighted sustainability concerns. Hurowitz argues that JBS’s NYSE listing might be intended as a communication of commitment to transparency but asserts that the company has repeatedly failed to address critical issues related to environmental destruction, greenhouse gas emissions, and human rights violations in its operations. This critique reflects a growing demand among investors for corporate accountability, particularly in industries with significant environmental footprints.
The internal governance dynamics at JBS also warrant attention. The proposal for the dual listing passed with a slim majority, securing only 52% of shareholder votes. Detractors have pointed out that the listing introduces a dual-class share structure that effectively escalates the voting power of the Batista brothers from around 48% to nearly 85%. This has led to discomfort among some investors, who express concern over the implications for corporate governance and decision-making practices within the company. Igor Guedes, an analyst at Genial Investimentos, noted that while some investors acknowledged these governance concerns, many ultimately chose to prioritize the potential financial benefits that could arise from the stock.
In summary, while the dual listing of JBS on the NYSE represents a pivotal moment in the company’s growth narrative, it has equally surfaced a complex array of ethical, governance, and sustainability issues. The path forward for JBS will likely hinge on its capacity to navigate this multifaceted landscape, balancing the imperative for growth with the equally crucial demands for transparency and accountability. As the JBS saga unfolds, stakeholders—ranging from investors to policymakers—will undoubtedly scrutinize the implications of this dual listing for the broader meat processing sector and its role in the global economy.