Smithfield Foods, Inc. has announced a deal to buy the European meats business of Sara Lee Corporation for $575m (£301m).
Virginia based Smithfield Foods is the biggest pork processing company in the world. Its UK arm, Smithfield Foods Ltd, was formed in 2004 from a merger of The Norwich Food Company and Ridpath PEK. Smithfield supplies the retail, food processing and foodservice industries with a range of fresh, frozen, canned and deli meats, branded or own-label.
The deal is expected to be completed by the end of September and Smithfield will finance the deal in a joint venture with
Oaktree Capital Management, LLC.
Robert A. Sharpe II is president of international operations at Smithfield, and will be made chief executive officer of the new company. He said: "The acquisition is an important step. Our strategy will be to develop leading companies with strong brands directed by dynamic local management."
Sara Lee's meat business made $1.1bn in sales last year in Europe. It is most prominent in France, Portugal and the Benelux countries, but the company also has a presence in the UK, Germany and Italy. Sara Lee sells meat under continental brand names such as Aoste, Justin Bridou and Nobre.
Smithfield sells packaged deli meat such as pepperoni and
chorizo under its own Authentic Deli brand, and also owns the Pek brand of tinned pork, hotdogs, and ham. Other European brands Smithfield owns include French charcuterie brand Jean Caby and Polish brand Morling.
"The Sara Lee business is well positioned with broad distribution and strong brands," said Sharpe. "In the UK, Sara Lee's business will compliment our presence through our subsidiary, Smithfield Foods Ltd."