Unilever merges food business with McCormick
Unilever explores $15.7bn deal with McCormick to combine food business, as it accelerates portfolio restructuring and responds to investor pressure for growth.
USA – Unilever Plc has agreed to merge most of its food business with US-based spice maker McCormick & Co. in a deal valued at US$44.8 billion, marking a major restructuring that will reshape both companies’ portfolios.
Under the agreement, Unilever will receive US$15.7 billion in cash along with McCormick shares worth US$29.1 billion. Post-transaction, Unilever and its shareholders will hold a 65% stake in the combined entity, which will emerge as a global seasonings and condiments company.
The transaction will be executed through a Reverse Morris Trust, allowing the separation and merger to be structured in a tax-efficient manner.
The deal effectively splits Unilever’s long-standing food business from its core operations, pushing the company further toward beauty, personal care and home care categories. The combined entity, meanwhile, is expected to operate at a significantly larger scale, bringing together complementary portfolios across spices, condiments and cooking products.
The new company is projected to generate around US$20 billion in annual sales based on recent financials, highlighting the scale of the combined operations.
The deal represents the most significant strategic move to date under CEO Fernando Fernandez, who took office in March 2025. It follows the spin-off of Unilever’s ice cream division last year, which included brands such as Ben & Jerry’s and Magnum.
Although Unilever’s food division is considered a high-margin segment, its growth has lagged behind the company’s personal care and beauty businesses. This has weighed on Unilever’s target of achieving overall group sales growth of between 4% and 6% in the near term.
The food business accounted for just over a quarter of Unilever’s total annual sales of €50.5 billion last year and employs a significant portion of the company’s global workforce of approximately 96,000 people.
Fernando Fernández, Chief Executive Officer of Unilever, said, “For Unilever, this transaction is another decisive step in sharpening our portfolio and accelerating our strategy towards high-growth categories as a €39 billion pureplay HPC company with a proven sector-leading growth profile.
“We are unlocking trapped value through a growth-led separation of Foods, creating a scaled, global flavor powerhouse.
“By combining Unilever Foods’ iconic leading brands and global reach with McCormick’s exceptional portfolio, category expertise and capabilities, we are establishing a focused, high-quality business with significant top line growth and value creation potential.”
The agreement does not include certain parts of Unilever’s food business, including its operations in India, indicating a selective carve-out rather than a complete exit from the category.
Unilever’s portfolio has historically included brands such as Hellmann’s, Maille and Marmite, built over decades of expansion in the packaged food segment.
The discussions come amid ongoing pressure from investors for the company to streamline its portfolio and focus on higher-growth categories.
Activist investor Nelson Peltz, who built a stake in Unilever in 2022, has been linked to calls for faster restructuring and was associated with leadership changes at the company.
The merger with McCormick also aligns with Unilever’s broader cost-saving programme launched in 2024, which aims to deliver approximately €800 million in savings over three years.
Separately, reports indicate that Unilever has introduced a global hiring freeze across all levels for at least three months, citing the impact of the widening conflict in the Middle East.
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