JBS of Brazil to Sell R$300 Million in Overseas Operations

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The meatpacking giant of Brazil, JBS announced on Tuesday (May 6th) that it will sell its beef operations in Argentina, Paraguay and Uruguay. The subsidiaries were acquired for a total value of US$300 million.

“The transaction was unanimously approved by the JBS Board of Directors of JBS and is conditioned to the approval of the (Brazil’s) Administrative Council for Economic Defense (CADE),” said the statement issued by the company.

According to the statement, the company plans to use the proceeds obtained from the transactions to reduce its financial leverage. The subsidiaries to be sold registered a positive balance of R$40 million on March 31st.

JBS is being investigated by the Brazilian Securities and Exchange Commission (CVM) in at least eight lawsuits, among which is insider trading. The company is said to have purchased large amount of US dollars before the announcement of a plea-bargaining agreement between then JBS’s CEO Joesley Batista and federal prosecutors.

As part of the leniency agreement Batista gave investigators a recording of a conversation with Brazil’s President Michel Temer, where the President supports the businessman’s bribes to former Chamber of Deputies President, Eduardo Cunha.

With speculation of a possible involvement of Brazil’s leader in what has turned out to be the country’s largest corruption scandal ever, the Lava Jato (Car Wash), the U.S. dollar surged against the Brazilian real in the foreign exchange market, leading the company to make millions in profits in the exchange variation.

Earlier this week, JBS’s holding company J&F, agreed to pay a fine of R$10.3 billion for corruption practices. The amount, to be paid in 25 years, represents the largest fine corruption activities in the world, according to Brazilian prosecutors.