31st Mar 2026 06:59
(Alliance News) - Unilever PLC is close to confirming plans to merge its Food business with US seasoning brand McCormick, the Financial Times reported on Tuesday.
Earlier this month, the London-based consumer goods firm disclosed an inbound offer for its Food division, which includes Hellman's mayonnaise, Knorr stock cubes and Colman's mustard. At the same time, Unilever confirmed that it had entered talks with Hunt Valley, Maryland-based food ingredients and flavours company McCormick.
Citing "people familiar with the matter", the FT said a deal announcement is expected on Tuesday, when McCormick is due to publish first-quarter results.
The FT's sources indicated that the combined company would be worth around USD60 billion, with the deal structured as a combination of cash and shares. This is to limit the tax charges payable by Unilever, with the sale of its Food unit through a reverse Morris trust.
Unilever stockholders will hold around two-thirds of the enlarged company, with the rest of the deal settle in cash, the sources added.
When Unilever disclosed it was in talks with McCormick earlier this month, it said: "The board believes Foods is a highly attractive business, with a strong financial profile led by market-leading brands in growing categories and is confident in the future of the Foods business as part of Unilever."
Shares in Unilever closed 0.5% higher at 4,500.00 pence on Monday in London, giving it a market capitalisation of USD131.90 billion. McCormick shares closed up 1.2% at USD53.72 in New York, for a market cap of 14.42 billion.
A deal between the two firms would follow it would follow the 18-month demerger of Unilever's ice cream business into Magnum Ice Cream Co NV, which completed last year. Unilever has kept a stake of almost 20% in the frozen desserts business, which it will sell down over the coming years.
After the ice cream spin-off, the food division booked 2025 sales of EUR12.9 billion, just under 26% of total group sales of EUR50.5 billion and a 22.6% underlying operating profit margin, versus 20.0% for the group. McCormick meanwhile reported net sales of USD6.84 billion for the year ended November 30, and a gross profit margin just shy of 38%.
Unilever had previously outlined plans to offload around EUR1.5 billion of local food brands in Europe, as it shifts focus to its beauty, personal care and wellbeing offering.
Around mid-March, the FT reported that Unilever had been in discussions with Kraft Heinz Co for a potential merger of their food brands. Those talks have since ended, according to the FT, but had concerned a combination of Unilever Foods and Kraft Heinz condiments.
By Holly Munks, Alliance News reporter
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