Danantara Investment Management, the investment arm of Indonesia’s sovereign wealth fund, will invest $2.5 billion for a 25% stake in a new joint venture holding JBS’s Australia and New Zealand operations.
The transaction implies a $10 billion post-money equity value and gives the Brazilian meatpacker a platform to expand across Southeast Asia.
The commitment is JBS’s second-largest transaction by value, behind only its $2.8 billion acquisition of U.S. chicken producer Pilgrim’s Pride in 2009. It is also the company’s most significant deal since its New York listing.
At the time of publication, JBS had a market capitalization of $14.6 billion in New York and traded at 6.4 times enterprise value to EBITDA. Depending on the methodology, the venture’s valuation could imply a multiple roughly twice as high, highlighting the potential to unlock value from JBS’s global portfolio.
The venture will house JBS’s beef, pork, salmon and processed-food operations in Australia and New Zealand. In the 12 months through March 31, those businesses generated nearly $9 billion in revenue and about $800 million in EBITDA, implying a margin of close to 9%.
Danantara will fund the transaction in stages. It will invest $800 million at closing for a 9.64% stake, followed by another $1.7 billion over three years as investment opportunities are identified, taking its holding to 25%.
The venture also plans to raise as much as $2.5 billion in debt, bringing its potential investment capacity to $5 billion.
For the first two years, the partnership will concentrate its investments in Indonesia. It may then pursue acquisitions and other opportunities elsewhere in Southeast Asia, as well as in Australia and New Zealand.
In a statement, JBS said the structure was designed to increase its investment capacity, accelerate regional growth and use its Australian operations as a platform to expand in markets it considers strategic to global protein consumption.
JBS is targeting markets with a combined population approaching 745 million, where urbanization and rising incomes are expected to lift protein demand. Indonesia, the Philippines and Vietnam are among the countries expected to drive global meat consumption in the coming years.
The agreement includes an exit route through an initial public offering of the venture within six years. If no IPO takes place by then, Danantara may convert its stake into JBS’s New York-listed shares under an agreed exchange ratio.
JBS shares rose more than 3% in premarket New York trading on Friday, signaling a positive initial response from investors.
The transaction remains subject to regulatory approvals in Australia.
Danantara was advised by PwC, BCG, A&O Shearman and Barrenjoey. JBS’s advisers were EY, De Brauw Blackstone Westbroek N.V. and MinterEllison.
This story was translated from the original Portuguese with the assistance of artificial intelligence and reviewed by The AgriBiz editorial staff.
