A Brazilian federal court has blocked meat processing giant JBS’s proposal to divest its beef operations in three South American markets.
JBS’ $300m sale of the select South American beef processing operations to rival Brazilian meatpacker Minerva was blocked by Federal Judge Ricardo Leite on grounds of the corruption charges faced by the company.
In his judgment, Leite said that JBS’ proposal to divest its beef processing plants in Argentia, Uruguay and Paraguay had the potential to impact an ongoing investigation in the corruption scandal.
Earlier this month, JBS had entered into a definitive agreement to divest its beef operations in the three South American countries to Pul Argentina, Frigomerc and Pulsa which are all controlled by Minerva.
JBS revealed its plans to appeal the court’s decision to block its proposed transaction with Minerva. In a statement, the company said: “In relation to today’s judicial ruling regarding the suspension of the sale of the Company’s operations in Argentina, Paraguay and Uruguay to companies owned by Minerva, JBS will take the necessary legal measures in order to appeal the decision.”
Adding to more trouble to JBS, the attorney general’s office is seeking for its assets to be frozen, as per a report in Reuters which cites the corruption scandal revolving around the Batista family that controls JBS with a 42% stake.
According to a statement from the attorney general’s office, the move to freeze JBS’ assets would guarantee that funds needed to compensate state-owned lender BNDES for irregular dealings with JBS will be saved.
Earlier in the week, JBS announced its plans to raise R$6bn ($1.8bn) through a divestment program which includes sale of a number of assets like Moy Park, Five Rivers Cattle Feeding and a 19.2% stake in Vigor.
Recently, J&F Investimentos, the parent of JBS had agreed to pay a $3.1bn fine as compensation for the alleged corruption charges faced by the Batista family.
