Unilever to Merge Food Division with McCormick in $44.8 Billion Transaction

Unilever and McCormick Agree to $44.8 Billion Deal, Creating Global Seasonings and Condiments Leader

In a massive transaction, Unilever Plc has agreed to combine its food business with spice maker McCormick & Co. in a $44.8 billion deal. The deal will give the owner of Hellmann’s mayonnaise control over a newly formed global seasonings and condiments company. Under the agreement, McCormick will pay the Anglo-Dutch company $15.7 billion and the equivalent of $29.1 billion McCormick shares for most of Unilever’s food business. This will leave Unilever and its shareholders with a 65% stake in the combined entity, including McCormick brands like French’s mustard.

The deal is the largest in the histories of both companies and will help recast Unilever as a global leader in beauty, personal and home care while turning McCormick into a bigger competitor in the global packaged food business. The transaction will be carried out through a so-called Reverse Morris Trust, a type of merger that is designed to be tax-free.

Unilever has been selling food for nearly 100 years. In addition to global brands like Hellmann’s, it owns smaller regional products like Maille Dijon mustard and Marmite spread. McCormick, on the other hand, is a much smaller company whose entire business only generates half the sales of Unilever’s food arm.

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The popularity of GLP-1 weight-loss drugs has meant that users are eating less or choosing fresher food, leading to struggles for big food businesses like Unilever. Unilever Chief Executive Officer Fernando Fernandez has made it clear that going forward he sees beauty, personal care and wellbeing – not food – as the keys to future growth.