SMITHFIELD, Va. – Smithfield Foods Inc. announced Wednesday that its Groupe Smithfield Holdings SL is in merger talks with Campofrio Alimentacion SA, the largest processed meat company in Spain.

Groupe Smithfield is a joint venture with Oaktree Capital Management LLC.

If the merger takes place, Smithfield and Oaktree would receive shares of the publicly traded Campofrio.

The company said that Groupe Smithfield and Campofrio have entered into a non-binding memorandum of understanding which has established the preliminary terms and conditions for a potential merger. The merger is dependent on negotiations and approval from shareholders and regulatory agencies. The merger must also receive takeover bid exemption from the Spanish securities regulator CNMV.

Source: Smithfield Foods Inc.