The company said that the merger will create a Europe wide company in the process meats sector with sale of more than $3 billion with market leadership in Spain, France, Belgium and Portugal. The company will have its headquarters in Madrid and will continue to operate under the Campofrio name.

"This is another key milestone in Smithfield's strategy to enhance its processed meats presence globally. The two companies are very complementary and merging them will provide many significant synergy opportunities," said C. Larry Pope, Smithfield president and CEO.

The merger, which is subject to shareholder and regulatory approval, including the grant of a takeover bid exemption by the Spanish securities regulator CNMV, is expected to close in Smithfield's third fiscal quarter. Smithfield will own 36 percent of the combined company after the merger.

Source: Smithfield Foods Inc.