Will JBS's latest IPO announcement actually make it to the stock market?
- Brazilian meatpacker JBS SA announced Monday it will launch a U.S. initial public offering of its JBS Foods International BV unit in the first half of 2017, The Wall Street Journal reported.
- JBS created the new subsidiary, JBS Foods International, to combine its international operations under one business.
- JBS initially announced its reorganization plans in August, which would have made the international business spinoff the parent company of the original, with its headquarters in Ireland. However, JBS had to backtrack on those initial plans after shareholders vetoed the decision in October.
Judging by past company experiences, it's difficult to say this IPO announcement is a sure bet. JBS was already in hot water with its initial reorganization plans, so shareholders could still voice opposition to this move before it hits the New York Stock Exchange next year.
JBS has also cried wolf on IPO attempts multiple times in the past. In February 2015, JBS called off what had been its fourth failed attempt at an IPO, which the company had originally announced in May 2014. But that IPO differed from this latest announcement: For the previously proposed IPO, the company would have spun off its pork, poultry and food operations in Brazil into a separate company, JBS Foods.
JBS is likely struggling to determine the best path for reorganization because the company continues to evolve through acquisitions like Cargill's U.S. pork business under its JBS USA Pork sector. At the same time, JBS's home country of Brazil has been embroiled in complex national politics, including former president Dilma Rousseff's impeachment in August and current President Michel Temer's attempts to restore fiscal discipline in the national government.
JBS shares saw a 19% increase to 11.05 Brazilian reals (about $3.25) Tuesday.
- The Wall Street Journal Brazil’s JBS Plans U.S. IPO for Foods International Unit
- Meatingplace JBS announces IPO of new international company on NYSE