Smithfield will buy Clougherty Packing as well as hog farm operations under PFFJ, or Pigs for Farmer John, in California, Arizona and Wyoming, expanding its supply chain in the United States.
The businesses being acquired contributed about $500 million in sales and about 3 cents per share in earnings to Hormel in fiscal 2016.
Smithfield, bought by WH Group in 2013 for $4.7 billion, is the world's largest pork processor and hog producer.
"While the businesses have performed well, they no longer align with our company's growth strategies," Hormel Chief Executive Jim Snee said in a statement.
Hormel said Farmer John harvests about 7,400 hogs per day.
Shares of Hormel Foods were marginally up at $35.10 in after-hours trading on Monday.