McCormick & Company and Unilever PLC have entered into an agreement to combine the two companies’ foods businesses, excluding Unilever’s food operations in India, Nepal and Portugal as well as several other units (Lifestyle & Nutrition; Buavita fruit juice; and the Lipton Ready-to-Drink business). The integration has created a global flavor powerhouse in high-growth categories, with approximately $20 billion in combined fiscal year 2025 revenue. The stock and cash deal valued Unilever’s food business at $45 billion, including debt.
After weeks of speculation, the joint announcement on March 31 follows Unilever’s 2025 spinoff of its ice cream division into the Magnum Ice Cream Company, sales of the Vegetarian Butcher, the Graze snacking brand, and disposal of its tea and spreads businesses.
Under terms of the deal and upon closing of the transaction, which is expected by mid 2027, Unilever and its shareholders will receive stock equating to 65.0% of the fully diluted combined-company outstanding equity, equivalent to $29.1 billion based on McCormick’s one-month volume-weighted average price of $57.84 per share. Unilever will also receive $15.7 billion in cash, subject to certain closing adjustments. This implies an enterprise value for Unilever Foods of approximately $44.8 billion, or roughly 13.8x fiscal year 2025 EBITDA. In addition, this reflects an enterprise value for McCormick of approximately $21.0 billion, or about 13.8x fiscal year 2025 EBITDA.
Upon closing of the transaction, Unilever shareholders are expected to own 55.1%, McCormick shareholders will own 35.0% and Unilever is expected to own 9.9% of the fully diluted combined-company’s outstanding equity. The transaction is not expected to give rise to US federal income tax for Unilever or its shareholders, thereby mitigating some of the overall tax costs.
The combination brings together two industry-leading organizations with complementary global footprints and portfolios of iconic brands across herbs, spices, seasonings, cooking aids, condiments and sauces. The combined enterprise is expected to benefit from expanded global reach, enhanced scale across foodservice and retail channels and greater resources to invest in innovation, brand-building and global distribution.
Brendan Foley, chairman, president and chief executive officer of Hunt Valley, Maryland, USA-headquartered McCormick, stated: ”This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavor. The Unilever Foods business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision. Together, we will be better positioned to accelerate growth in attractive categories. This combination will create a diversified flavor leader with a robust growth profile that remains differentiated by its focus on flavoring calories while others compete for them.”
Fernando Fernández, chief executive officer of London, England-headquartered Unilever, remarked: “This transaction is another decisive step in sharpening our portfolio and accelerating our strategy towards high-growth categories as a €39 billion pure play 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.”
Leadership, Governance
Upon closing of the transaction, Foley is expected to remain chairman, president and chief executive officer of McCormick, and Gabriel will remain executive vice resident and chief financial officer. Executives from both companies will serve in key leadership roles.
Unilever will appoint four of twelve members of the combined company’s board of directors. In addition, one Unilever executive is expected to serve as one of the four directors appointed for two years to support a successful integration.
