Unilever, McCormick near deal to create $60 billion food business

Title Unilever and McCormick Near $60 Billion Food Business Deal A Strategic Union of Flavors

As Unilever continues to revamp its portfolio, the Anglo-Dutch consumer goods company is poised to make a significant move in the food industry. In advanced talks with spice maker McCormick, Unilever has the potential to create a $60 billion food business powerhouse.

The proposed deal would combine Unilever's food division with McCormick's operations, resulting in a Reverse Morris Trust structure that offers tax benefits. This combination would give Unilever shareholders majority control of the merged entity, retaining a 65% stake.

Barclays analysts have valued Unilever's food business between €28 billion and €31 billion, including debt. Adding McCormick's $14.2 billion market capitalization and the proposed $15.7 billion in cash, the combined entity could be worth over $60 billion.

This massive deal marks a significant move by Fernando Fernandez, Unilever's CEO since March 2025, who has been working to revamp the company's portfolio. Last year, he completed the spin-off of Unilever's multibillion-euro ice cream business, home to Ben & Jerry's and Magnum.

Unilever's food unit is a high-margin business, but it has lagged behind the company's personal goods and beauty businesses in terms of sales growth. As such, this deal could help accelerate overall group sales by 4-6% in the near term.

The proposed combination would exclude certain assets, including Unilever's operations in India. The company has been under pressure from investors to shed food brands for years, particularly after billionaire activist Nelson Peltz built a stake in Unilever in 2022.

Peltz has been linked to the departure of two CEOs, Alan Jope and Hein Schumacher, who investors felt were not streamlining Unilever's portfolio fast enough. The deal with McCormick comes as Unilever continues its cost-cutting program, which aims to save around €800 million in costs over three years.

A Genteel Heritage

Unilever's roots in the food sector date back to 1860, when one of its Dutch founding families began building up its business in the butter trade. Over the years, the company has acquired numerous food and beverage brands, from Marmite to Colman's and Horlick's.

However, as shoppers increasingly turned away from packaged food in favor of fresh groceries seen as healthier, Unilever's food business has faced challenges. The rise of GLP-1 weight loss drugs has further eroded demand, particularly due to stiff competition from cheaper private label brands that make similar products.

In recent years, Unilever has divested several noncore food assets, including snack brand Graze and plant-based meat brand The Vegetarian Butcher. This deal with McCormick marks a significant step in the company's efforts to shape its future in the food industry.

Conclusion

The proposed deal between Unilever and McCormick has the potential to create a $60 billion food business powerhouse, driving growth and accelerating sales for both companies. As the global food industry continues to evolve, this strategic union of flavors could have far-reaching implications for consumers and investors alike.

Keywords Unilever, McCormick, food business, deal, Reverse Morris Trust, gentility, hospitality, travel, foodie

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.