UPDATE 2-Smithfield seeks majority stake in Campofrio

* Smithfield Foods seeks controlling interest in Campofrio

* Smithfield currently has 37 pct stake in Campofrio
(Adds company comment, details, share activity)

CHICAGO, April 6 (Reuters) – Leading U.S. pork producer
Smithfield Foods Inc (SFD.N: Quote, Profile, Research) confirmed it is in talks to
acquire a majority stake in European meat producer Campofrio
Food Group SA (CPF.MC: Quote, Profile, Research) for 500 million euros ($715 million).

Smithfield shares were down 3 percent at $23.30 in midday
trading following its confirmation of the bid, which it will
make jointly with Campofrio chairman Pedro Ballve.

The move would increase Smithfield presence in Europe and
raise its share of Campofrio to nearly 88 percent from 37

“The acquisition of Campofrio would further Smithfield’s
long term strategy of becoming a leading global consumer
packaged meats company,” said C. Larry Pope, president and
chief executive officer.

The takeover bid would be subject to various conditions,
including completion of due diligence and approval by the
Spanish securities commission.

“We are assessing potential synergies relating to sales,
operations and raw materials with both our U.S. and
international businesses,” Pope said.

While no financing arrangements have been finalized, the
company anticipates the estimated 500 million euros required to
fund the takeover would be provided through a combination of
existing liquidity and capital markets financings that will
enhance shareholder value while maintaining a conservative
balance sheet.

In 2010, Campofrio reported revenue of 1.83 billion euros
($2.617 billion).
(1 euro = $1.43)
(Reporting by Bob Burgdorfer; editing by Andre Grenon)

UPDATE 2-Smithfield seeks majority stake in Campofrio