Meat packer JBS agrees joint venture with Indonesian wealth fund arm

SAO PAULO, Aug ‌7 (Reuters) - Brazilian ​meat ​packer JBS 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.

• 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.

(Reporting ‌by Roberto Samora ​and Gabriel Araujo; Writing by Oliver Griffin; Editing by David Goodman, David Holmes and Nick ‌Zieminski)

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