Waterford processor Dawn Meats has agreed a deal to take a stake in France's second biggest beef producer.
The initial purchase is expected to be for around €40m and will see the privately-owned Irish company buy an initial 49pc stake in Elivia's beef processing unit.
Elivia is owned by Terrena, one of France's largest farming cooperatives. Following the deal Elvia will effectively become a joint venture with the Irish company.
Dawn Meats had sales of more than €1bn last year and its customers include McDonalds, Marks & Spencer, and Sainsbury. The business exports to more than 40 countries.
The Elivia business also had sales of about €1bn last year. French cooperative group Terrena had sales of €4.7bn in 2013.
Following its initial stake purchase Dawn will have an option to eventually buy up to 70pc of the joint venture in 2018 and 2019, the companies said in a joint statement yesterday.
The value of the transaction was not disclosed, but sources close to the situation said the initial stake will be bought for under €40m, a price that had been speculated about in media reports.
The plan is to invest €100m in modernising the loss-making Elvia beef unit over three years, following completion of the deal.
"We want to take the opportunity... to establish with Dawn Meats a major player with solid prospects and long-term outlets on both the European and world market," Terrena president Hubert Garaud said.
It is understood that part of the rationale for the planned joint venture structure is that Elivia can leverage Dawn Meats' experience in developing quality assurance and traceability processes, which are increasingly demanded by premium customers and exporters.
For Dawn Meats, part of the rationale for the deal is to be among the sector's consolidators, or otherwise risk being among the companies that are snapped up by bigger rivals.
"It's a case of eat or be eaten. The reality is that consolidation is happening, and Irish businesses in the food industry must adapt to this," Dawn Meats' chief executive, Niall Browne, recently told the Irish Independent.
"Amid the explosive growth of middle class consumption in new, previously unexplored markets, opportunities abound for ambitious companies," Mr Browne added.
He is also a believer in shorter supply chains in the wake of the horsemeat scandal.