Unilever Nears Deal to Create $60 Billion Food Giant With McCormick
Hellmann’s mayonnaise-maker’s board met Monday afternoon to review details of the transaction
- Unilever is in advanced talks to sell its food business to spice-maker McCormick, creating a new roughly $60 billion food behemoth.
- The cash-and-stock deal, including a roughly $16 billion cash component, is expected to be structured as a reverse Morris trust.
- Unilever shareholders are expected to own about two-thirds of the new business, leaving Unilever focused on other products.
Unilever ULVR 1.09%increase; green up pointing triangle is in advanced talks to combine its food business with spice-maker McCormick MKC 1.22%increase; green up pointing triangle in a deal that would create a new food behemoth worth roughly $60 billion, including debt, according to people familiar with the matter.
A cash-and-stock deal could be announced as soon as Tuesday, when McCormick is set to report its latest quarterly results, the people said, cautioning that the plans could still slip.
The major strategy shift by Unilever would continue a trend of consumer conglomerates streamlining their businesses and would leave U.K.-based Unilever focused on beauty, personal-care and home products.
As part of the deal, Unilever shareholders are expected to own about two-thirds of the new food business, the people said. The deal includes a cash component of around $16 billion, the people said.
The deal is expected to be structured as a so-called reverse Morris trust, which offers tax benefits.
Unilever has a market value of more than $130 billion. Its food labels include Hellmann’s mayonnaise and Knorr soup mixes.
McCormick’s market value was a little over $14 billion as of Monday. The company is known by its red-capped bottled spices and rectangular tins and owns brands including French’s yellow mustard, Old Bay seasoning and Cholula hot sauce.
Unilever’s board was meeting Monday afternoon to review details of the transaction, the people familiar with the matter added.
The Wall Street Journal reported earlier this month that Unilever and McCormick were in talks regarding a potential food combination.