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UPDATE 1-Brazil's JBS withdraws plan for U.S. processed food unit IPO

(Adds details, share performance throughout)

SAO PAULO/BRASILIA, Oct 16 (Reuters) - JBS SA has pulled a planned $500 million initial public offering of processed food subsidiary JBS Foods International BV, almost six months after a spree of corruption and food safety scandals in Brazil hurt investor demand for the deal.

In a Friday filing with the U.S. Securities and Exchange Commission, JBS Foods International requested a withdrawal of the IPO. Neither company elaborated further nor gave a new timetable for the IPO.

Both companies first announced plans for a U.S. offering on Dec. 5. São Paulo-based JBS, the world's No. 1 meatpacker, reaffirmed plans to list the subsidiary in August, saying a transaction could take place by the end of next year.

The proposal for the JBS Foods International IPO was first tested in March, after a scandal over an alleged bribery of health officials triggered bans on Brazilian meat exports. Two months later, two members of the family that controls JBS agreed to a plea bargain deal in Brazil relating to a corruption probe.

A collapse of the plan is a setback for Brazil's billionaire Batista family, which owns 42 percent of JBS and saw the IPO as a way to improve JBS's global standing. The transaction was seen as a way to help decouple JBS's businesses from Brazil - where reputational issues impaired share performance in recent months.

Reuters reported in March and in May, shortly after the food safety and corruption scandals, respectively, that JBS would press ahead with the $1 billion IPO plan despite dwindling investor confidence.

Common shares fell 0.7 percent to 8.58 reais on Monday. The stock is down 25 percent this year.

Brothers Wesley and Joesley Batista were arrested last month in connection with insider trading and other offenses related to their plea deal. Wesley, the elder of them and also JBS's former chief executive, had to quit as a result.

Both Batistas worked personally on the refinancing of 21 billion reais ($6.7 billion) in short-term debt of JBS and spearheaded the sale of several assets.

($1 = 3.1562 reais) (Editing by Bernadette Baum and Steve Orlofsky)