Unilever and US-based flavour manufacturer and distributor McCormick have agreed to combine Unilever’s Foods business with McCormick, forming a $20bn flavour-focused company.
The transaction will unite portfolios including McCormick, Knorr and Hellmann’s, along with brands such as Cholula, Maille and Frank’s.
Following completion, Unilever will concentrate on its beauty, wellbeing, personal care and home care segments.
McCormick will continue under its existing name, maintaining its NYSE listing and headquarters in Hunt Valley, Maryland.
It will also establish an international headquarters in the Netherlands and seek a secondary European listing.
Leadership of the combined entity will remain with McCormick’s current CEO and CFO, while Unilever Foods will have representation across senior management and the board.
The deal assigns an enterprise value of $44.8bn to Unilever Foods.
Under the agreed terms, Unilever and its shareholders will receive McCormick voting and non-voting shares representing 65% of the fully diluted equity, valued at $29.1bn, alongside $15.7bn in cash.
McCormick CEO Brendan Foley added: “This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavour. The Unilever Foods business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision.”
Completion is targeted for mid-2027, subject to McCormick shareholder approval, regulatory clearances and customary conditions.
The combined business is expected to generate around $600m in annual run-rate cost synergies by the end of the third year.
A further $100m in cost and revenue synergies will be reinvested into growth initiatives.
Separately, the carve-out of Unilever Foods will reposition Unilever as a pureplay Home and Personal Care company, with €39bn ($45.26bn) in revenue based on fiscal year 2025.
Unilever CEO Fernando Fernandez said: “For Unilever, this transaction is another decisive step in sharpening our portfolio and accelerating our strategy towards high-growth categories as a €39bn pureplay HPC company with a proven sector-leading growth profile.”
