JBS agrees US$2.5 billion joint venture with Indonesian wealth fund arm

BRAZIL – Brazilian meat processor JBS has agreed to establish a joint venture with PT Danantara Indonesia (DIM), an investment arm of Indonesia’s sovereign wealth fund, to expand its presence in the protein sector across several markets.

The partnership will focus on investments in protein production in Indonesia, Southeast Asia, Australia and New Zealand, according to a securities filing from JBS.

DIM will commit US$2.5 billion to the venture, with an initial payment of US$800 million due when the transaction closes and the remainder to be invested over a period of up to three years.

JBS will contribute all of its existing businesses in Australia and New Zealand to the new company as part of the agreement.

Once the venture is fully funded, it will seek to secure up to another US$2.5 billion through debt financing to support its investment plans.

For the first two years following completion, funds provided by DIM will be restricted to investments in Indonesia’s protein production industry.

The partners have also agreed to a five-year mutual lock-up period, during which their interests in the venture will be subject to restrictions on disposal.

JBS and DIM plan to eventually pursue an initial public offering of the joint venture, potentially creating a separate listed vehicle for their investments.

The transaction remains subject to regulatory clearances and other customary closing requirements before it can be completed.

JPMorgan said the arrangement could allow JBS to continue pursuing expansion and acquisitions while limiting the amount of cash it needs to commit at a time when its balance sheet is under greater pressure.

The joint venture gives JBS access to additional capital for growth while allowing the Brazilian meat producer to place its Australia and New Zealand operations into a broader regional investment structure.

JBS is the world’s largest beef producer and operates meat processing businesses across multiple international markets, with the new partnership set to extend its investment strategy further into Asia-Pacific.

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