Unilever Sells Food Division to McCormick in Multibillion-Dollar Deal

McCormick and Unilever announced a $44.8 billion merger of the Maryland spice maker with Unilever's food division, creating a combined company worth roughly $65 billion and projected to generate $20 billion in annual sales, the second-largest food transaction in history.

Under the terms announced Tuesday, McCormick will pay $15.7 billion in cash and the equivalent of $29.1 billion in shares for most of Unilever's food portfolio. Unilever shareholders will own 55.1% of the combined entity, while McCormick shareholders retain 35% and Unilever itself holds a 9.9% stake. The deal is structured as a Reverse Morris Trust, a tax-efficient mechanism that makes it the largest such transaction ever involving a European company.

The merger brings together two of the world's most recognizable pantry brands. Unilever Foods' portfolio is anchored by Hellmann's mayonnaise, sold in more than 65 countries, and Knorr, a household name across more than 90 countries that reaches roughly five billion consumers worldwide. Those two brands alone account for about 70% of Unilever Foods' annual sales. They will join McCormick's existing stable of Frank's RedHot, Cholula, French's mustard, Old Bay, and Zatarain's.

McCormick CEO Brendan Foley, who will lead the combined company as Chairman, President, and Chief Executive, called the transaction the most consequential in the spice maker's 137-year history, eclipsing its $4.2 billion purchase of RB Foods in 2017. "This transformative combination accelerates McCormick's strategy and reinforces our continued focus on flavour," Foley said. "The Unilever Foods business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision." The combined company will remain headquartered in Maryland.

For Unilever, the deal marks the final exit from food after CEO Fernando Fernandez, who took the top job in March 2025, has methodically narrowed the company's focus. Fernandez oversaw the spin-off of the ice cream division, home to Ben & Jerry's and Magnum, before turning to the food unit as the next candidate for separation. With the McCormick transaction closed, Unilever will operate exclusively across Beauty, Wellbeing, Personal Care, and Home Care, a portfolio that generated roughly €39 billion in fiscal year 2025 revenues. Unilever plans to use the $15.7 billion cash payment to reduce debt toward approximately 2.0x net leverage and fund €6 billion in share buybacks through 2029.

Integration teams have already identified $600 million in expected annual cost synergies, largely from supply chain consolidation and shared procurement to be captured over 36 months. Net leverage at closing is expected to be 4.0x or below, with the company targeting a return to investment-grade levels. McCormick CFO Marcos Gabriel will continue in that role under the combined structure.

Both boards unanimously approved the agreement. The deal is expected to close in mid-2027, subject to regulatory clearances in multiple jurisdictions. McCormick shares fell roughly 6% following the announcement, a reaction that analysts attributed to dilution concerns and the scale of the leverage required to finance the cash portion of the transaction.