A new merger on the horizon is looking to spice things up in your local grocery store. In this week’s entry in Your M&A and Corporate Partner, Partner Connie Phelps examines the recent news that seasoning icon McCormick is teaming up with Unilever Foods to create a multi-billion dollar “global flavor powerhouse” home to a litany of kitchen staples and breaks down why each company is walking away from the transaction saying, “Winner, winner, chicken dinner!”
Spice giant McCormick & Company and consumer goods company Unilever recently announced their agreement to combine most of Unilever Foods’ portfolio with McCormick to create an international spice and spreads powerhouse in a deal valued at nearly $45 billion. As part of the merger, Unilever will receive 65% of the combined company’s diluted equity, valued at approximately $29.1 billion, along with $15.7 billion in cash.
This merger is a continuation of McCormick’s strategy of integrating popular and legacy brands to expand its reach beyond spices and into condiments and spreads. In addition to the company’s kitchen-essentials spice offerings, it has added brands such as Frank’s RedHot, Cholula, French’s, and Stubbs to its portfolio in the past eleven years. Now, it plans to add Hellmann’s and Knorr, two of the most valuable brands in Unilever’s pantry that account for nearly 70% of its food business revenue.
Unilever, on the other hand, is moving forward with its plan to release most of its food business (aside from its section in India) to focus on becoming a leader in the health, beauty, and wellness industries, where the company feels it has more momentum and growth potential. Unilever also recently spun off its ice cream business, The Magnum Ice Cream Company, in 2025.
The merger has been unanimously approved by McCormick’s and Unilever’s Boards of Directors and is expected to close in mid-2027, pending approval by McCormick’s shareholders and a likely IRS ruling on the transaction. McCormick’s CEO and CFO will lead the new combined company, and Unilever will appoint four of the twelve members on the Board of Directors.
What Can Businesses Learn From This?
McCormick’s decision to merge with Unilever Foods’ portfolio looks to be a great strategic move for the spice maker. By tapping into Unilever’s established brands and wide reach, McCormick can accelerate its growth and add new product offerings to its customers. But McCormick is not the only winner in this transaction.
Unilever’s decision to separate from most of its food-related businesses does not mean the company is slowing down; it is simply shifting focus to new high-growth areas it has identified. In a press release announcing the merger, Unilever noted: “[t]he Transaction is another decisive step to reshape Unilever into a simpler, sharper, higher growth company.”
Just nine days after announcing the merger with McCormick, Unilever also announced its acquisition of Grüns, a nutrient supplement provider that better aligns with the company’s new health and wellness direction. It joins a growing portfolio that includes Dove, Liquid I.V., Dermalogica, and the recently acquired Dr. Squatch.
Scaling a business often requires an evolving strategy, and what worked in the past may not be the best path forward for future growth. Unilever’s adaptive approach has allowed the company to expand into 190 countries and become a household name.
Interested in learning how strategic transactions can help your business scale and succeed? Contact M&A and Corporate lead Connie Phelps at cphelps@berenzweiglaw.com.