Unilever to Merge Food Business with McCormick in $65B Deal

Unilever is nearing a final agreement to merge its food business with McCormick & Company, creating a combined entity valued at nearly $65 billion. The transaction includes $15.7 billion in cash that would give Unilever majority control of the new spin-off, which will combine brands such as Knorr and Pot Noodle with McCormick’s condiments and spices including French’s mustard, Old Bay seasoning, and Cholula hot sauce.

The merger marks a significant shift for Unilever, whose origins in the food business date back to 1860. The company will retain a 9.9% stake in the combined entity but plans to sell it down one year after the deal closes. Notably, certain assets such as Unilever's operations in India are excluded from this agreement.

The companies expect regulatory approval and plan to close the transaction by mid-2027. McCormick will maintain its headquarters in Hunt Valley, Maryland, while adding an international headquarters in the Netherlands. The new company will also have a European stock listing.

The Unilever European Works Council (UEWC) has expressed concern about potential job losses from the merger. The UEWC represents nearly 20,000 employees in Europe and Britain and warned that a possible transaction could lead to further personnel measures. According to Reuters, 'We fear that a possible transaction could be accompanied by further personnel measures,' said the UEWC.

The deal is part of Unilever's strategy to refocus its portfolio by expanding in personal care and beauty, and selling some food brands. Analysts describe the Reverse Morris Trust model as 'sensible.' The transaction aims to add billions of dollars in annual sales for McCormick and expand its portfolio further into spreads and condiments.