Unilever has announced an agreement to merge its food business with its US competitor McCormick in a deal valued at £33.8 billion, forming one of the largest packaged food companies globally.
The two companies were in the final stages of discussions earlier on Tuesday and confirmed the transaction just hours later.
This merger will bring together Unilever’s brands, including Hellmann’s, Marmite, Knorr, and Colman’s mustard, with McCormick’s brands, such as French’s mustard and Schwartz spices.
According to the terms of the deal, Unilever will receive approximately $15.7 billion (£11.9 billion) in cash upfront, along with equity in the newly combined business.
Unilever shareholders will hold 55.1% of the merged entity, while Unilever itself will retain a 9.9% stake, giving it a combined control of 65% over the food unit. The valuation of Unilever Foods at $44.8 billion (£33.8 billion) highlights the ongoing consolidation in the global food sector, as companies aim to strengthen their positions in key markets.
Industry analysts suggest that this merger will create a strong competitor against rivals such as Nestlé and Kraft Heinz, particularly in the condiments and packaged food segments, potentially leading to greater efficiencies and an expanded global reach for both companies.
A spokesperson for Unilever stated, “This merger represents a unique opportunity to combine complementary brands and expertise, while unlocking value for shareholders.”
Fernando Fernandez, chief executive of Unilever, said: “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.”
The deal is expected to be finalised later this year, pending regulatory approvals.
