JBS Rewarded for Breaking Family Grip on Brazil Meat Giant

(Bloomberg) -- For the first time in its 65-year history, JBS SA will be run by someone from outside the Batista family dynasty.

Gilberto Tomazoni, 60, was named chief executive officer after winning unanimous approval by the board, JBS, the world's largest meat producer, said Tuesday in a filing. The shares jumped on Wednesday. Tomazoni has been at the company since 2013 and was previously chief operating officer. He replaces Jose Batista Sobrinho, the 85-year-old patriarch of the billionaire Batista family, who took over in September 2017 after his sons Wesley and Joesley were removed from the company amid a corruption scandal that transfixed Brazil.

Tomazoni's appointment is a notable move for the Batista clan. When the crisis struck in 2017, the family held tightly to its empire, bringing in Wesley Batista's son and the founder of the company that bears his initials, who had long been away from day-to-day operations.

Operations Expert

At the time that Tomazoni, seen as an operations specialist, was appointed as COO, speculation emerged that he might one day rise to CEO. Since then, JBS has shed assets in South America and paid down more than $2 billion in debt. Through Tuesday, the stock this year gained 17 percent, the most among main peers, The rally erased the loss that followed the Batista brothers' plea deal in May 2017, when they confessed to bribing over 1,800 politicians over the years.

On a conference call with investors, Tomazoni said his appointment offers JBS an opportunity to boost governance and compliance standards. He said he's fully committed to transparency “in all relations.” Improving margins through efficiency gains and listing JBS in the U.S. market are priorities, he said.

On Wednesday, JBS jumped as much as 5.2 percent to 12.08 reais in Sao Paulo, leading gains on the benchmark Ibovespa index.

Guilherme Cavalcanti was named as CFO effective Jan. 15 with unanimous board approval, JBS said Wednesday in a filing. He worked at pulp giant Fibria Celulose SA since 2012 and was CFO at Vale SA.

“This can be interpreted as another move away from the ‘old guard,' who built the company but are nonetheless ‘colored by' their connection to past misdeeds, to the ‘new guard,' who can help burnish the company's image as part of the process of ultimately preparing the company for a U.S. IPO,” said Ian McCall, who advises on $190 million in emerging-market assets at First Geneva Capital Partners.

Tomazoni hails from the countryside. The son of a small-town hog farmer, he spent his entire career in the meat industry, mostly in now-defunct Sadia SA, where he started as an intern in 1982 and eventually became CEO. After prospering under Tomazoni's leadership, Sadia faced crippling losses after the chief financial officer made wrong-way currency bets that eventually led to a takeover by rival Perdigao SA in 2009. Tomazoni was replaced after the merger.

After a short stint at Bunge Ltd., he joined JBS in 2013 to help develop the chicken business.

To contact the reporter on this story: Gerson Freitas Jr. in São Paulo at gfreitasjr@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Patrick McKiernan, Margot Habiby

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