May 18, 2016

One year after acquiring Ireland-based poultry business, Moy Park for $1.5 billion, JBS plans to restructure and spin off its international business into a new entity to be called JBS Foods International.

The new business, which will be headquartered in Ireland by November of this year, will include JBS’ non-Brazilian beef, chicken, and processed food businesses and its Brazilian chicken and processed food unit, Seara, according to a company statement. Going forward, JBS SA will hold the Brazilian beef, leather, and biodiesel businesses and will continue to trade in Sao Paulo under the name JBS Brasil. JBS Foods International will become the parent company, while JBS SA will become a subsidiary.

The restructuring, which is being undertaken by the world’s largest meatpacker to grow the company into a leading player in the global food sector, also calls for JBS Foods International to be listed on the New York Stock Exchange (NYSE), possibly by November.

The New York listing is expected by JBS to “increase its access to international financial markets, improving the liquidity for its shares, with the prospect of reducing its cost of capital,” JBS said in a recent statement.

“We see ourselves as a global food company that was born in Brazil and that’s the way we want to be seen: as a global player,” JBS co-founder and CEO, Wesley Batista told Reuters.

Brazil’s current political and economic tensions have been challenging for the country’s companies along the agricultural and food value chains. Inflation and interest rates are at their highest in a decade, while high costs and a lack of available financing have put the sector under pressure.

In addition, JBS’ shares have fallen by as much as 32% this year, landing at their lowest since 2014 in January amid legal difficulties for owner and chairman, Joesley Batista, who was accused by public prosecutors of financial crimes, and most recently, a Brazilian newspaper accused the company of making illegal political donations, according to Bloomberg.

However, when asked by Reuters if these difficulties could hinder the company’s plans, Batista responded that investors are “less and less worried with that issue by the day.”

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by GAI News Staff