Unilever and McCormick to Merge Food Divisions in $65 Billion Flavor Powerhouse Deal

Unilever and McCormick & Company announced Tuesday a deal to merge Unilever's food division with the American spice maker, creating a combined entity valued at roughly $65 billion with approximately $20 billion in annual revenue. The transaction values Unilever's food business at 44.8 (billion USD) — total valuation of Unilever's food division, with McCormick paying $15.7 billion in cash and offering shares in the newly combined company. Unilever shareholders will hold a 55.1% stake in the merged group, McCormick shareholders will hold 35%, and Unilever itself will retain a 9.9% stake it intends to sell at a later date. The deal, unanimously approved by both companies' boards of directors, is expected to close by mid-2027, pending shareholder votes and regulatory clearance. The merged entity will operate under the McCormick name, with global headquarters remaining in Hunt Valley, Maryland, and international headquarters established in Rotterdam, Netherlands.

Knorr, Hellmann's and French's under one roof The combination brings together two complementary brand portfolios that together span the condiment and flavoring aisle in markets across roughly 150 countries. Unilever contributes Knorr, Hellmann's, Maille, Bertolli, and Horlicks, among others, while McCormick adds French's mustard, Stubb's barbecue sauce, Cholula chili sauces, and Thai Kitchen spice pastes. The Unilever food business in India is explicitly excluded from the transaction. McCormick chief executive Brendan Foley described the strategic rationale on a call with Wall Street analysts and investors. „Together, we create a focused, global flavor powerhouse, scaled, resilient and uniquely concentrated on flavor” — Brendan Foley via The New York Times Unilever chief executive Fernando Fernandez, who took the role in March 2025, also addressed the call. „We believe this combination strengthens the competitive position of the business” — Fernando Fernández via The New York Times The two companies project annual cost synergies of 600 (million USD) — projected annual cost savings from the merger, though one-time costs to achieve those savings are estimated at approximately $300 million, with Unilever separately expecting separation costs of between 400 and 500 million euros.

Rotterdam keeps research hub, but Unilever name fades from Netherlands The deal carries particular significance for the Netherlands, where Unilever's food division has long been formally established and headquartered in Rotterdam. The merged company will maintain what it describes as a substantial presence in the country, including the food division's global research center in Wageningen, according to Dutch Minister of Economic Affairs Heleen Herbert. McCormick also intends to pursue a secondary stock exchange listing in Europe, in addition to its existing listing in New York. However, the transaction effectively ends the Unilever name's association with the Netherlands: the company gave up its dual British-Dutch nationality in 2020 to incorporate exclusively in London, and the food division proceeding under the McCormick name removes the last major Dutch-linked entity. „For Unilever, this transaction is another decisive step in further sharpening our portfolio and accelerating our strategy focused on fast-growing categories” — Fernando Fernández via de Volkskrant The deal is structured as a Reverse Morris Trust transaction, a mechanism designed so that neither Unilever nor its shareholders will incur federal income tax liability in the United States as a result of the separation. Brendan Foley and Marcos Gabriel, McCormick's chief financial officer, are both expected to continue in their current roles leading the combined company, with Unilever appointing four of twelve board seats.

Unilever was formed in 1930 through the merger of Dutch margarine producer Margarine Unie and British soap maker Lever Brothers, giving the company deep roots in both the United Kingdom and the Netherlands. For nearly a century, food represented a core pillar of the business, accounting for roughly a quarter of total revenues as recently as last year. In recent years, Unilever divested a series of food brands including margarine, tea activities, Conimex, and The Vegetarian Butcher, before spinning off its ice cream division — including Magnum, Cornetto, and Ben & Jerry's — into a separately listed company called The Magnum Ice Cream Company in 2025. The strategic shift toward beauty and personal care accelerated under pressure from activist investor Nelson Peltz, whose Trian fund has held a stake in Unilever for four years, with Peltz also sitting on the company's board of directors.

Food industry consolidation wave reshapes global brands The Unilever-McCormick agreement is the latest in a series of major restructurings that have reshaped the global packaged food industry over recent years. The New York Times noted that in 2023 cereal giant Kellogg separated into two companies, and in 2024 the snacking spinoff Kellanova was acquired by Mars in a deal valued at $36 billion. Last year, Italian candy company Ferrero agreed to acquire WK Kellogg, the cereal business, in a deal valued at $3.1 billion. Executives at Kraft Heinz, which had been on a path toward splitting up, reversed course and decided to remain a single entity. The global condiment market has been a relative bright spot for the food sector, driven by consumer demand for bold and spicy flavors, though growth has slowed as consecutive years of price increases pushed consumers toward cheaper private-label alternatives. McCormick reported a 17% increase in sales for the first quarter of 2026, though the company acknowledged that nearly all of that growth came from its January acquisition of McCormick de Mexico, with underlying sales rising just 1%. Additional uncertainty hangs over the global economy as rising oil prices linked to the ongoing U.S.-led military operation against Iran push up fuel and logistics costs that could eventually be passed to consumers.

Unilever portfolio transformation: Food division (before: Core business, ~25% of total revenues, after: Spun off and merged with McCormick by mid-2027); Ice cream division (before: Part of Unilever group, after: Spun off in 2025 as The Magnum Ice Cream Company); Strategic focus (before: Broad consumer goods conglomerate, after: Beauty care, personal care, and cleaning products only)

Reverse Morris Trust Trian fund cost synergies