Brazil’s J&F Investimentos, which controls the world’s largest meatpacker, JBS SA, put an end to a long-running legal dispute in the U.S. over bribes it paid in Brazil, agreeing Wednesday to pay $128 million to settle the case.
J&F admitted in 2017 to paying about $150 million in bribes to Brazilian politicians to secure cheap government funding to fuel one of the most ambitious global acquisition sprees in Brazilian corporate history. The affair landed its two major controllers, the billionaire brothers Joesley and Wesley Batista, in jail for several months. J&F Investimentos, in a federal court in New York on Wednesday, pleaded guilty to violating the U.S. Foreign Corrupt Practices Act.
“As part of this scheme, executives at the highest levels of the company used U.S. banks and real estate to pay tens of millions of dollars in bribes to corrupt government officials in Brazil to obtain hundreds of millions of dollars in financing for the company and its affiliates,” said Brian Rabbitt, acting assistant attorney general of the Justice Department’s criminal division.
JBS said in a letter addressed to shareholders Wednesday that it and its controlling shareholder are committed to best corporate practices and close cooperation with authorities in all jurisdictions in which they operate. “The agreements announced today represent an important step in their continuous efforts to improve their compliance and corporate governance programs,” JBS said. A J&F spokesperson declined to comment.
JBS, which began as a family-owned slaughterhouse in the Brazilian countryside, has invested billions of dollars in the U.S. market, acquiring meatpacker Swift Foods and chicken producer Pilgrim’s Pride Corp. Under the terms of Wednesday’s agreement, the Justice Department imposed a penalty of $256.5 million on São Paulo-based J&F, but ordered it only to pay half of that to U.S. authorities to compensate for fines already paid to Brazilian authorities.
The arrangement could free up the meatpacker to list its international unit in the U.S., which it has been pursuing on and off for the past few years, said Pedro Galdi, an analyst at brokerage Mirae Asset.