Unilever Sells Foods Division to McCormick for US$44.8bn

Unilever has entered into an agreement to sell its foods division, encompassing brands such as Marmite, Horlicks and Knorr, to McCormick, the US-based food company.

The deal values Unilever's Foods business at an enterprise value of US$44.8bn.

According to Unilever, the transaction could enable the creation of two distinct, faster-growing entities once finalised, with each business better positioned to align with its respective categories, capabilities and value creation approach.

Implications for Unilever

The transaction values Unilever Foods at roughly US$44.8bn, representing approximately 13.8 times the fiscal year 2025 earnings before interest, taxes, depreciation and amortisation.

Under the terms of the agreement, Unilever and its shareholders are set to receive shares representing 65% of the fully diluted combined-company outstanding equity, worth approximately US$29.1bn based on McCormick's one-month volume-weighted average price.

Additionally, Unilever is expected to receive US$15.7bn in cash, subject to specific closing adjustments.

The deal reflects an enterprise value for McCormick of roughly US$21.0bn, or approximately 13.8 times its 2025 fiscal year.

Unilever's food portfolio

Unilever's food assets feature Knorr, the widely recognised stock and seasoning brand, alongside Marmite.

According to Bloomberg reports, Hellmann's and Knorr account for 60% of the company's food sales.

Fernando Fernández, Chief Executive Officer of Unilever, says: "For Unilever, this transaction is another decisive step in sharpening our portfolio and accelerating our strategy towards high-growth categories as a €39bn (US$44.7bn) pureplay home and personal care (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."

Unilever suggests that separating its Foods division could position the company as a high-growth business, with estimated revenues of €39bn (US$44.7bn) based on fiscal year 2025.

Following completion, Unilever's operations will span beauty, wellbeing, personal care and home care.

McCormick's strategic evolution

McCormick is a US food company whose portfolio includes brands such as Cholula, Frank's RedHot, French's and Schwartz.

The company will maintain its current name, its Maryland global headquarters and New York Stock Exchange (NYSE) listing.

McCormick plans to establish international headquarters in the Netherlands and is considering a secondary listing in Europe.

Brendan Foley, Chairman, President and Chief Executive Officer of McCormick, says: "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."

According to McCormick, the merger unites two industry-leading organisations with complementary global footprints and portfolios of recognisable brands spanning herbs, spices, seasonings, cooking aids, condiments and sauces.

The combined entity could potentially benefit from expanded global reach, enhanced scale across retail and foodservice channels and greater resources to invest in innovation, brand-building and global distribution.