Brazilian meat giant JBS has entered a joint venture with Indonesia’s sovereign-wealth fund to “pursue investment opportunities” in protein production.

The agreement has been struck through its subsidiary JBS USA with PT Danantara Investment Management (DIM), the financing unit of the South East Asian country’s wealth fund.

JBS said the venture will target Indonesia and the rest of South East Asia, along with Australia and New Zealand, according to a statement today (7 August).

With dual listing in Brazil and the US, JBS added the areas of interest will include “greenfield, brownfield and acquisitions”.

The joint venture will be set up through the transfer of JBS’s full equity interests in its existing businesses in Australia and New Zealand into a Dutch holding company before the completion of the transaction.

DIM will hold 25% of the venture by subscribing to shares worth $2.5bn. However, it will initially contribute $800m for a 9.64% stake and build up the rest over three years post completion of the joint venture.

Once DIM is fully invested, the joint-venture company plans to secure an additional $2.5bn through a debt offer, taking the total capital raised to $5bn.

“For governance and economic interest purposes, during the first three years following completion, DIM will be deemed to have a 25% participation in the joint venture company, provided its actual participation is above 7.5%,” today’s statement read.

“After this three-year period, the parties' respective governance rights will be determined by their actual respective shareholdings.”

Set criteria specifies that for the first two years of the venture, DIM’s contributions can only be used to “fund greenfield investments, acquisitions of, or investments into, new or existing businesses operating in the protein production sector in Indonesia”.

Following the two-year window, any remaining DIM funds can be funnelled into “a wider range of investment opportunities and growth purposes, including new or existing businesses in the protein production sector in all of South East Asia, Australia and New Zealand, or for capital expenditure on greenfield or brownfield projects in these jurisdictions”.

An IPO option is also on the cards six years after the venture is signed off. The partnership has to first gain the necessary regulatory approvals.

JBS also set up a joint venture in the Middle East earlier this year with Oman Food Capital (OFC), the agri-food investment arm of the country’s Oman Investment Authority.