Unilever has agreed to combine its foods division with McCormick & Company in a deal that will create a $20bn global flavour business spanning herbs, spices, seasonings, sauces and condiments, while repositioning Unilever as a €39bn pure-play home and personal care company.
A global flavour powerhouse
Unilever PLC and McCormick & Company have announced an agreement to combine Unilever’s Foods business with McCormick to create a global flavour powerhouse with a portfolio of leading brands including McCormick, Knorr and Hellmann’s, alongside growth brands such as Cholula, Maille and Frank’s.
The combined company will have revenues of approximately $20 billion, based on fiscal year 2025 data, and a strong presence across retail and foodservice markets. The deal reflects an enterprise value of $44.8 billion for Unilever Foods, equivalent to an EV/Sales ratio of 3.6x and an EV/EBITDA multiple of 13.8x, based on McCormick’s one-month volume-weighted average share price of $57.84.
As part of the transaction, Unilever and its shareholders will receive shares equal to 65% of the fully diluted combined company equity, while Unilever will also receive $15.7 billion in cash. Unilever shareholders will own 55.1% of the combined company, with Unilever retaining a 9.9% stake, while McCormick shareholders will hold 35%.
The transaction is expected to close by mid-2027, subject to shareholder approval, regulatory clearances and other customary conditions.
Building a global flavour business
The combination will bring together complementary portfolios across herbs, spices, seasonings, cooking aids, sauces and condiments, supported by global R&D capabilities and a broad geographic footprint.
The merged business is expected to generate around $600 million in annual run-rate cost synergies, with full value realised by the end of year three. A further $100 million in incremental cost and revenue synergies will be reinvested to support growth.
McCormick will retain its name, global headquarters in Hunt Valley, Maryland, and its NYSE listing, while establishing an international headquarters in the Netherlands and planning a secondary listing in Europe.
Unilever’s strategic shift to home and personal care
Following the separation of its foods division, Unilever will become a €39 billion pure-play home and personal care (HPC) company, operating across Beauty, Wellbeing, Personal Care and Home Care.
Based on FY2025 revenues, Beauty, Wellbeing and Personal Care will account for around 67% of group turnover, while emerging markets will represent 62% of revenues. The company said the shift will strengthen its focus on high-growth categories and markets.
Unilever reaffirmed its medium-term financial framework, targeting mid-single digit underlying sales growth, supported by at least 2% underlying volume growth and modest operating margin expansion.
Executive comments
Fernando Fernandez, Chief Executive Officer of Unilever, commented:
“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.
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.
This is a combination built on strong strategic and cultural alignment, providing exciting opportunities for our people and ensuring our Foods brands continue to thrive as part of a global flavour leader. Our retained ownership stake reflects our conviction in the strength of the combined company and its future prospects.”
Brendan Foley, Chief Executive Officer of McCormick, commented:
“This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavour. 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 flavour leader with a robust growth profile that remains differentiated by its focus on flavouring calories while others compete for them.
Unilever Foods’ global portfolio of strong brands, combined with our proven expertise in insight-driven brand-building and integration, will enable us to deliver flavour in new and exciting ways for more consumers, driving significant growth across the combined portfolio and value for all stakeholders. Integrating two global organisations of this scale requires disciplined execution, and we are confident that our detailed integration roadmap, experienced teams from McCormick and Unilever, external advisors and our strong partnership will enable us to capture the full value of this opportunity. McCormick is the right partner for Unilever Foods’ brands and employees, and our shared culture and values will empower our combination. We are excited to welcome their exceptional talent and international expertise to our Power of People culture.”
Leadership and governance
Upon completion, Brendan Foley will serve as Chairman, President and Chief Executive Officer of McCormick, while Marcos Gabriel will be Executive Vice President and Chief Financial Officer.
Executives from both McCormick and Unilever Foods will take senior leadership roles, and Unilever will appoint four of the twelve members of the combined company’s board.
