Shares of Brazil-based JBS, the world’s largest meatpacking company, are preparing for a splashy public debut. This is despite the company’s long and storied history, replete with claims of corruption and lawmaker harassment. JBS’s U.S. subsidiary, Pilgrim’s Pride, recently made headlines for donating $5 million to Donald Trump’s inauguration committee, raising questions about the company’s political connections and ethical practices.
JBS—now owner of more than 80% of Pilgrim’s Pride—has had designs on the U.S. public market for decades. The firm made news in December 2008 when it announced plans for an initial public offering (IPO) in 2009. Those plans were delayed and pushed back twice, never coming to fruition. By the end of 2016, JBS had laid out plans for a revived U.S. IPO as part of an overall plan to reorganize the company.
In response to the released recordings, the Brazilian federal government opened an investigation into JBS and its highest-ranking officials. They focused on corruption and bribery claims during this time. The public spotlight on JBS suddenly focused like a laser beam. This came after a massive fine for illegally purchasing cattle that were supposedly raised in protected areas of the Amazon rainforest. These issues have fueled opposition to JBS’s U.S. listing from various lawmakers, who express concerns over the company’s ethical record.
Joesley Batista and Wesley Batista, sons of JBS’s founder, have been the protagonists in the company’s story. Though they participated in many instances of widespread fraud, they obtained deferred-prosecution agreements by working with prosecutors during investigations into the company’s practices. Yet their deep ties to many high-profile controversies have fueled the alarms about JBS and its lack of corporate governance.
JBS, meanwhile, is preparing for its own public debut in the United States. Stakeholders are intently monitoring its performance and any potential spoiling of the party from its contentious history. Though promising, the company will have to deftly chart the regulatory gauntlet ahead. Accomplishing all of that while stoking investor confidence will be vital to getting IPO right.