Unilever Foods to merge with McCormick in $44.8bn deal

Unilever PLC and McCormick & Company have agreed to merge Unilever’s Foods business with McCormick, creating a global flavour-focused company with a combined portfolio of iconic and high-growth brands.

The new entity will include leading names such as McCormick, Knorr and Hellmann’s, alongside growth brands including Cholula, Maille and Frank’s. Based on fiscal year 2025 projections, the combined business will generate $20 billion in revenues.

Strategic separation sharpens Unilever focus

The transaction will separate Unilever Foods, allowing Unilever to operate as a pureplay Home and Personal Care (HPC) business with €39 billion in FY25 revenues. Post-separation, Unilever will focus on Beauty, Wellbeing, Personal Care and Home Care, targeting faster-growing geographies and premium segments while maintaining strong margins and innovation capabilities.

Fernando Fernandez, Chief Executive Officer, Unilever: "We are unlocking trapped value through a growth-led separation of Foods, creating a scaled, global flavour powerhouse. By combining Unilever Foods’ iconic brands with McCormick’s portfolio, we are establishing a focused, high-quality business with significant top-line growth and value creation potential."

Transaction structure and financial terms

Unilever and its shareholders will receive a mix of McCormick voting and non-voting shares representing 65 percent of the fully diluted combined company, along with $15.7 billion in cash. Unilever shareholders will own 55.1 percent of the new company, with Unilever retaining a 9.9 percent stake, and McCormick shareholders holding 35 percent.

The transaction reflects an enterprise value of $44.8 billion for Unilever Foods, with an EV/Sales ratio of 3.6x and an EV/EBITDA multiple of 13.8x based on recent McCormick share prices. The deal is expected to deliver approximately $600 million in annual cost synergies by the end of year three, with an additional $100 million of reinvested growth synergies.

Brendan Foley, Chief Executive Officer of McCormick: "This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavour. Together, we will be better positioned to accelerate growth in attractive categories, creating a diversified flavour leader with a robust growth profile."

Governance and operational plans

The combined company will be led by McCormick’s CEO and CFO, with senior Unilever Foods executives in key roles. McCormick will retain its global headquarters in Hunt Valley, Maryland, maintain its NYSE listing, and establish an international headquarters in the Netherlands with a planned secondary European listing.

The deal is expected to close by mid-2027, subject to shareholder and regulatory approvals, Works Council consultation, and customary closing conditions. A tax-efficient “Reverse Morris Trust” structure will allow the transaction to be largely tax-free for Unilever and its shareholders.

Value proposition for Unilever

The separation unlocks shareholder value, simplifies Unilever’s portfolio, and strengthens its growth profile. Post-transaction, Beauty, Wellbeing and Personal Care are expected to account for around 67 percent of turnover, with 90 percent of revenues in leading category positions. Unilever will continue disciplined investment in R&D, brand marketing, and bolt-on acquisitions, alongside €6 billion in share buy-backs between 2026 and 2029.

Fernando Fernandez: "This is another decisive step in sharpening our portfolio and accelerating our strategy toward high-growth categories. Our retained stake reflects confidence in the strength of the combined company and its future prospects."

www.unilever.com

www.mccormickcorporation.com

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