US meat processor Smithfield Foods has announced that it has purchased a 15.2% stake in Campofrio Alimentacion for approximately US$87.8m.

Smithfield said Campofrio is the largest meat processor in Spain and one of Europe’s largest diversified meat processors, with estimated annual sales of about €1bn (US$1.26bn).

Campofrio, whose main business is pork processing, has operations in Portugal, Russia, Poland, Romania and France, and exports to over 40 countries. 

The shares were acquired in a privately negotiated transaction from a single shareholder. 

“This transaction provides a strategic partner to develop synergies with our operations in France and Poland to exploit many attractive opportunities in Europe and Eastern Europe,” said Joseph W. Luter, III, Smithfield’s chairman and chief executive officer.

“As there is limited overlap among our operations, this opens new markets to Smithfield. We are attracted to Campofrio because the company is well-managed and has strong brands. Additionally, Campofrio recently completed a major restructuring and, in our opinion, has considerable potential to increase profitability in 2004 and beyond,” Luter added.