Unilever PLC and McCormick & Company have announced a definitive agreement to combine Unilever’s Foods business with McCormick, creating a global flavour powerhouse. The transaction reflects an enterprise value of approximately $44.8 billion for the Unilever Foods division. This move is designed to transform Unilever into a pureplay consumer goods company focused on beauty, wellbeing, personal care, and home care.
As per the company, the deal is structured as a Reverse Morris Trust, which is intended to be tax-efficient for shareholders. Under the terms of the agreement, Unilever and its shareholders will receive 65% of the combined company’s equity. Specifically, Unilever shareholders will own 55.1%, while Unilever will retain a 9.9% stake in the new entity. Unilever will also receive $15.7 billion in cash upon closing, which is earmarked to pay down debt, cover separation costs, and support a €6 billion share buy-back programme scheduled between 2026 and 2029.
The combined entity will house an impressive portfolio of iconic and high-growth brands. By merging McCormick’s expertise in spices and seasonings with Unilever’s global reach, the new business will manage brands such as Knorr, Hellmann’s, McCormick, Cholula, and Maille.
The combined company is expected to generate annual revenues of approximately $20 billion based on recent fiscal data. Leadership believes the merger will achieve $600 million in annual cost synergies by the end of the third year, with an additional $100 million in incremental synergies to be reinvested into growth initiatives.
According to Unilever, this separation allows the company to sharpen its focus on the Home and Personal Care sectors, which currently represent a €39 billion business. Post-separation, Unilever’s portfolio will be more heavily weighted toward high-growth markets, with the United States and India contributing 38% of total turnover. The remaining categories of beauty, wellbeing, and personal care will now account for roughly 67% of Group turnover, segments that are viewed as more attractive due to higher margins and structural tailwinds driven by premiumisation.
McCormick will maintain its global headquarters in Hunt Valley, Maryland, while establishing an international headquarters in the Netherlands to leverage Unilever’s existing R&D capabilities in the region. The combined business will be led by the current McCormick CEO and CFO, with senior management representation from Unilever Foods. The transaction has received unanimous approval from the boards of both companies, with completion targeted for mid-2027 following regulatory reviews and customary closing conditions.
Fernando Fernandez, Chief Executive Officer (CEO) 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 flavour 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.”
“This is a combination built on strong strategic and cultural alignment, providing exciting opportunities for our people and ensuring our Foods brands continue to thrive as part of a global flavour leader. Our retained ownership stake reflects our conviction in the strength of the combined company and its future prospects.” he added
Brendan Foley, Chief Executive Officer (CEO) of McCormick, said, “This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavour. 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 flavour leader with a robust growth profile that remains differentiated by its focus on flavouring calories while others compete for them.”
“Unilever Foods’ global portfolio of strong brands, combined with our proven expertise in insight-driven brand-building and integration, will enable us to deliver flavour in new and exciting ways for more consumers, driving significant growth across the combined portfolio and value for all stakeholders.”
“Integrating two global organisations of this scale requires disciplined execution, and we are confident that our detailed integration roadmap, experienced teams from McCormick and Unilever, external advisors and our strong partnership will enable us to capture the full value of this opportunity. McCormick is the right partner for Unilever Foods’ brands and employees, and our shared culture and values will empower our combination. We are excited to welcome their exceptional talent and international expertise to our Power of People culture.” he added.
