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 percent.

"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).