Brazil’s largest meatpacking company, JBS SA, secured shareholder approval Friday for its long-expected dual listing plan, clearing the last condition needed for the company to begin trading on the New York Stock Exchange (NYSE). 

According to local media outlet InfoMoney, the decision, already priced in by the market, made JBS shares rise to R$43.41 at 11 a.m. local time, up 2.71%, after a temporary trading halt in the morning.

JBS’s certification of 100% confirmations in Japan in June 2022 marks a significant step towards global financial conquest.

JBS SA’s current shares would be combined into a new Dutch holding company, JBS Participações, which will serve as the international listing platform.

From controversy to clearance

The vote came after a contentious run-up to Friday’s decision. Initial results announced a day earlier suggested shareholders were against the dual listing by a small majority.

One of the main issues was the controversial dual-class share structure, which would dilute minority shareholder power.

According to the authorised model, each two shares of JBS SA will be swapped for one mandatorily redeemable preferred share, which will thereafter convert into a Brazilian Depositary Receipt (BDR) backed by a Class A share of JBS NV.

Shareholders in control will most likely have this structure to effectuate such voting power. As of now, 48.34% of voting shares are owned by the Batista clan, who founded the company and still control it.

And after the restructuring, its estimated voting power of Batistas could reach as high as 85%, further increasing its influence in corporate decisions.

Minority shareholders and governance implications

Governance advocates and institutional investors have become increasingly concerned about the dual-class share structure.

While experts believe that exposure to the United States will raise valuation multiples and attract global capital, minority shareholders are concerned about the centralisation of voting power.

Critics believe that the new system reduces minority monitoring and may insulate the leadership from shareholder accountability.

Several consulting companies have voiced cautions about the governance implications of this design, claiming it could have long-term consequences for transparency and board response.

A decade in the making

The approval ends a saga that has spanned more than a decade.

JBS has previously sought a US listing but has stumbled over many hurdles, including the fallout from the Lava Jato corruption probe and opposition from influential shareholders.

Back in 2016, the proposal was prevented partly due to opposition from the Brazilian Development Bank’s investment arm (BNDES), which was then the biggest shareholder outside the Batista family.

Nevertheless, BNDES has been gradually decreasing its ownership and earlier this year made a deal not to vote on the dual listing.

Political and environmental pushback

The dual listing concept has also sparked interest outside of financial circles.

Environmental organisations and politicians have highlighted concerns about JBS’s track record on sustainability, market consolidation, and ethical behaviour.

In 2024, a bipartisan group of US senators wrote a formal letter to the Securities and Exchange Commission (SEC) pushing it to prohibit the company’s listing in the US, citing corruption and environmental dangers.

Despite these concerns, JBS has highlighted the possible benefits of the relocation. According to the corporation, the new corporate structure would improve corporate governance, provide access to international investors, and lower the overall cost of capital.

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