McCormick & Company, Incorporated is set to combine with Unilever's Foods business, excluding India and other businesses, to create a global flavor leader with approximately $20 billion in combined fiscal year 2025 revenue.

Upon closing of the transaction, Unilever and its shareholders are expected to receive shares equating to 65% of the fully diluted combined-company outstanding equity, equivalent to $29.1 billion based on McCormick's one-month volume-weighted average price of $57.84. Unilever will also receive $15.7 billion in cash, subject to certain closing adjustments. This implies an Enterprise Value for Unilever Foods of approximately $44.8 billion, or approximately 13.8 times fiscal year 2025 EBITDA. In addition, this reflects an enterprise value for McCormick of approximately $21 billion, or approximately 13.8 times fiscal year 2025 EBITDA.

Unilever shareholders are expected to own 55.1%, McCormick shareholders will own 35.0% and Unilever is expected to own 9.9% of the fully diluted combined-company outstanding equity. The transaction is not expected to give rise to U.S. federal income tax for Unilever or its shareholders, thereby mitigating some of the overall tax costs associated with the transaction.

"This transformative combination accelerates McCormick's strategy and reinforces our continued focus on flavor,” says Brendan Foley, chairman, president and CEO of McCormick. “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 flavor leader with a robust growth profile that remains differentiated by its focus on flavoring calories while others compete for them."

Unilever Foods has a global portfolio of flavoring and cooking aids, condiments, sauces and other food products, led by the Knorr and Hellmann's brands, which comprise approximately 70% of sales. Knorr serves more than five billion consumers across 90 countries, and Hellmann's reaches consumers in more than 65 countries. Alongside these brands, Unilever Foods' portfolio includes local brands across EMEA, Latin America and APAC. The business has achieved an underlying sales CAGR of approximately 2.8% over the past two years, supported by consistent volume growth.

McCormick's portfolio of brands includes McCormick, French's, Frank's RedHot, Cholula, Stubb's, OLD BAY and Lawry's. In addition to retail and branded foodservice offerings, McCormick develops custom flavors and condiments for customers as well as its own products within its Flavor Solutions segment.

“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,” says Unilever CEO Fernando Fernández. “We are unlocking trapped value through a growth-led separation of Foods, creating a scaled, global flavor 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 companies say this combination is positioned to unlock new regions, flavors, innovation and consumption occasions in both retail and foodservice channels across the combined business. McCormick's brands will benefit from greater access to high-growth regions in EMEA, Latin America and APAC served by Unilever Foods' extensive infrastructure and distribution. Unilever Foods' brands will have an enhanced strategic runway for growth in North America, where McCormick has a stronger profile and capabilities.

McCormick says it is committed to remaining a flavor focused business and will integrate and leverage Unilever Foods' technology capabilities, R&D centers and manufacturing footprint. The total breadth of flavor insights, advanced technology and technical expertise across R&D, marketing and supply chain will further strengthen resources to drive acceleration in innovation and product development for the combined company and its customers.

Upon closing of the transaction, Foley is expected to continue as chairman, president and CEO of McCormick, and Marcos Gabriel is expected to remain executive vice president and CFO. Executives from both companies will serve in key leadership roles. Upon closing, Unilever will appoint four of 12 members of the combined company Board of Directors. In addition, one Unilever executive is expected to serve as one of the four directors appointed for two years to support a successful integration.

McCormick will maintain its global headquarters in Hunt Valley, Maryland, and have an international headquarters in the Netherlands. Unilever Foods has a long-standing presence in the Netherlands, which is home to its R&D capability that supports its deep sector expertise. Management views this capability as a core strength of the combined company and intends to maintain a substantial presence in the Netherlands. The combined company is planning to have a secondary stock listing in Europe to reflect the global nature of Unilever's current shareholder base.

As part of a larger, flavor-focused company, employees of both businesses will gain access to expanded career growth and professional development opportunities.

The separation of Unilever's Foods business from the Unilever Group is expected to be structured as a Reverse Morris Trust transaction that is not expected to give rise to U.S. federal income tax for Unilever or its shareholders. The agreement has been unanimously approved by both the McCormick and Unilever Boards of Directors.

McCormick has received $15.7 billion in committed bridge financing from Citigroup Global Markets Inc., Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc., and intends to fund the cash component of the purchase price through a combination of cash from its balance sheet and proceeds from new debt issuance.

The transaction is expected to close by mid-2027, subject to McCormick shareholders' approval, receipt of required regulatory approvals and the satisfaction of other customary closing conditions. Works council consultation will be conducted prior to the closing of the transaction.