McCormick will buy Unilever’s food business for a combination of cash and equity, in a deal that values the Unilever unit at nearly $45 billion, the two food companies announced.
To purchase most of Unilever Foods’ portfolio, including Hellmann’s mayo and U.K. favorite Marmite, McCormick will pay $15.7 billion in cash. Unilever shareholders will own 55.1% of the combined company, while Unilever will hold a 9.9% stake.
The deal will add billions of dollars in annual sales for McCormick and expand the spice giant’s portfolio further into spreads and condiments. It already owns Frank’s RedHot and Cholula hot sauces and French’s mustard and mayo. About 70% of Unilever Foods’ sales come from Hellmann’s and Knorr, a food brand known for its seasonings, stock cubes and soups.
For Unilever, divesting much of its food business allows the company to focus on its personal-care segment, which is growing faster. In December, Unilever spun off its ice cream business, now trading separately as Magnum Ice Cream Co.
The merger with McCormick does not include Unilever’s food business in India.
The two companies expect that the deal will close in mid-2027, pending shareholder and regulatory approval. McCormick is projecting sustainable organic sales growth of 3% to 5% after the two businesses merge.
“This is a combination of two companies already with the support and the discipline and the knowledge of running the business, coming together to execute this integration,” McCormick CEO Brendan Foley said on a joint investor call with Unilever on Tuesday.
He later said on a call with reporters that McCormick had been thinking about a potential deal with Unilever’s food business for “a number of years.”
When the deal closes, Unilever will appoint four out of the 12 members on the combined company’s board. For the first two years, one of those directors will be a Unilever executive.
McCormick plans to maintain its global headquarters in Hunt Valley, Maryland, and to add an international headquarters in the Netherlands, the long-standing home for Unilever Foods. The combined company will also have a secondary stock listing in Europe.
The deal follows a broader trend among Big Food. Many packaged food and beverage companies have been getting leaner through divestitures and spinoffs as consumers buy less of their products. In 2024, nearly half of mergers and acquisitions activity in the consumer products industry came from divestitures, according to consulting firm Bain.
Shares of McCormick fell 6% in morning trading, while Unilever’s stock down 4%, reflecting investors’ hesitance about the mega-merger. Historically, the industry has a mixed record when it comes to such deals — for example, Kraft Heinz or Keurig Dr Pepper.
“We acknowledge the significant strategic merit and likely compelling [earnings per share] accretion from this potential transaction but also concede the hefty likely deal value, execution risk and resultant majority ownership of the combined entity by Unilever shareholders could dampen initial investor enthusiasm,” Barclays analyst Andrew Lazar wrote in a note to clients on March 20, after The Wall Street Journal reported the initial talks between the two companies.
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