Brazil’s JBS asks shareholders to overlook opposition and approve a US stock listing

Making meat is a messy business. But for Brazilian meat giant JBS, getting approval to trade its shares on the New York Stock Exchange has been even messier.

Environmentalists, animal rights groups, U.S. lawmakers and even some of its own investors have tried to stop a U.S. listing for JBS, noting the company’s long record of corruption, monopolistic behavior and environmental destruction.

But JBS has persevered, saying dual listings in Sao Paulo and New York would attract new investors and better reflect its global portfolio. Late last month, the U.S. Securities and Exchange Commission granted the company’s request to list its shares on the New York Stock Exchange.

JBS is one of the world’s largest food companies, with more than 250 production facilities in 17 countries. Half of its annual revenue comes from the U.S., where it has more than 72,000 employees. It’s America’s top beef producer and it’s second-largest producer of poultry and pork.

On Friday, JBS’ minority shareholders – who hold 30% of its shares – are scheduled to vote on the dual-listing plan. If they approve it, the company could list its shares in New York as early as next month.

Early vote totals, which JBS released Thursday in a filing in Brazil, showed that 52% of shareholders opposed the plan. But there were many more votes to be counted, so the outcome was far from clear.

Last fall, 20 environmental organizations — including Mighty Earth, Greenpeace and Rainforest Action Network — signed an open letter to JBS investors opposing the listing, saying it would put the climate at greater risk.

Glass Lewis, an influential independent investor advisory firm, was also among those recommending that shareholders reject the plan.

In its report, Glass Lewis said the recent return of brothers Joesley and Wesley Batista to the JBS board should concern investors. The brothers, who are the sons of JBS’ founder, were briefly jailed in Brazil in 2017 on bribery and corruption charges.

“In our view, the involvement of the company and of Joesley and Wesley Batista in multiple high-profile scandals has tarnished the company’s reputation, undermining stakeholder trust and posing a significant risk to its competitive position,” Glass Lewis said.

Glass Lewis also objected to the company’s plan for dual share classes, which would give the Batistas and other controlling shareholders more voting power.

In its response to Glass Lewis’ report, JBS said it has established more stringent controls and anti-corruption training at the company in recent years. It also said a U.S. listing would ensure more oversight from U.S. authorities.

“We believe this transaction will increase our visibility in global markets, attract new investors and further strengthen our position as a global food industry leader,” JBS Global CEO Gilberto Tomazoni said in a statement last month when the company announced Friday’s vote.

But many U.S. lawmakers also aren’t convinced JBS belongs on the New York Stock Exchange.

In a letter sent last week to JBS, U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, noted that Pilgrim’s Pride — a U.S. company owned by JBS — was the largest single donor to President Donald Trump’s inaugural committee, with a $5 million gift. The SEC’s approval came just weeks after that donation, Warren said.

“I am concerned Pilgrim’s Pride may have made its contribution to the inaugural fund to curry favor with the Trump administration,” Warren wrote in the letter, which asked the company why the donation was made.

In a statement, JBS said it has a “long bipartisan history of participating in the civic process.”

Warren was also among a bipartisan group of 15 U.S. senators who sent a letter to the SEC in January 2024 urging the agency to reject a U.S. listing for JBS. The senators, a diverse group that rarely agrees on policy, included Republicans Marco Rubio of Florida and Josh Hawley of Missouri, Democrat Cory Booker of New Jersey and Independent Bernie Sanders of Vermont.

The letter noted that in 2020, J&F Investments, a controlling shareholder of JBS that is owned by the Batista family, pleaded guilty to bribery charges in U.S. federal court and agreed to pay fines of $256 million.

It also said Pilgrim’s Pride pleaded guilty to price-fixing charges in 2021. And it said U.S. Senate investigations found that JBS is “turning a blind eye” to rainforest destruction in the Amazon by its suppliers.

“Approval of JBS’ proposed listing would subject U.S. investors to risk from a company with a history of blatant, systemic corruption, and further entrench its monopoly power and embolden its monopoly practices,” the letter said.