Meat packer JBS agrees joint venture with Indonesian wealth fund arm

• Once fully funded, the venture plans to raise up to $2.5 billion in additional debt financing.
• DIM will pay an initial $800 million at closing, with the remaining invested over up to three years thereafter.
• JBS will contribute 100% of its Australia and New Zealand businesses.
• For the first two years after closing, DIM investment funds may only be deployed into Indonesia's protein production sector.
• Parties have agreed a mutual five-year lock-up and intend to pursue an initial public offering (IPO) of the joint venture.
• Completion is subject to regulatory approvals and other customary closing conditions, JBS said.
• The transaction is a creative way for JBS to keep its growth and M&A agenda moving "while preserving cash at a moment when the balance sheet appears more constrained," J.P. Morgan said in a research note.

Brazilian meat packer JBS JBS.N has agreed a joint venture with PT Danantara (DIM), an arm of Indonesia's sovereign wealth fund, to pursue investments in protein production across Indonesia, Southeast Asia, Australia and New Zealand, it said on Friday.

The venture will include a $2.5 billion investment from the Indonesian fund and will hold JBS's existing Australia and New Zealand businesses, JBS said in a securities filing.