JBS' US unit files for US$2 billion IPO

The US unit of the world's largest meat processor, JBS SA filed for an initial public offering of up to US$2 billion on Wednesday (July 22), making it the largest planned offering in the US IPO pipeline.

JBS SA, which is based in Brazil, has been rapidly expanding in recent years by acquiring other beef processors. In 2008, JBS SA bought a 50 percent stake in Italy's Inalca, and took over Smithfield Foods Inc's beef business and Australia's Tasman Group.

JBS USA, made up of its US and Australian plants, earned US$15.4 billion in 2008, according to a prospectus filed with the US Securities and Exchange Commission.

That tally accounted for about 78 percent of JBS SA's gross revenue for the first quarter of 2009, according to the filing.

The earnings did not indicate an expected timing for the deal's pricing. But if the IPO raises US$2 billion, it will be the largest US IPO since credit card operator Visa's US$19 billion IPO in March 2008. 

JBS USA said it plans to use the IPO's proceeds for "substantial investments in order to significantly expand our direct distribution."

In March 2007, JBS went public on the Sao Paulo Stock Exchange. Four months after, it bought 100 percent of US-based Swift Foods Co, becoming the world's largest meat-packing company in terms of slaughter capacity.

So for this year, 11 IPOs in the United States, excluding those of real estate investment trusts, have raised US$2.2 billion, including the US$828 million IPO by infant nutrition maker Mead Johnson Nutrition in February.

JBS USA has applied to list on the New York Stock Exchange under the symbol "JBS" and will also list on the Sao Paolo Stock Exchange.

The IPO will be led by J.P. Morgan and Bank of America Merrill Lynch.