The Virginian-based meat processing company Smithfield Foods has entered into exclusive negotiations for Sara Lee's European meat business that are expected to draw to a close in a matter of weeks, just-food has learnt.

Sara Lee's packaged meat business, headquartered in Hoofddorp in The Netherlands, is a GBP1.1bn (US$2bn) business that leads the market in France, Belgium, The Netherlands and Portugal. It also has a presence in the UK, Germany and Italy. It operates a number of well-known brands, including Aoste, Justin Bridou and Nobre, along with producing branded meat products with its trade partners.

"The Sara Lee business has strong brands and broad distribution, which we believe would be an important addition to our European strategy," said Robert Sharpe II, president, international operations of Smithfield.

"Each of the companies that make up the European Meats business are well positioned in their respective country of operation. This rounds out our strategy of developing strong companies with local identities in each country in which we invest.

"The potential acquisition of this division of Sara Lee will complement our growing presence in the United Kingdom through our subsidiary, Smithfield Foods," Sharpe said.

Smithfield anticipates funding the acquisition through a joint venture with an un-named private equity firm. It will operate on a stand alone, non-recourse basis.

"An agreement is expected to be signed within a couple of weeks," Smithfield spokesperson Andy Rowlands told just-food. "Closing will take longer because of legal and regulatory matters," he added.