On Tuesday, March 31, the seasoning giant McCormick (also known as 味好美 in Chinese) and Unilever jointly announced their merger in the food business sector. This move will create the second-largest merger and acquisition record in the history of the food industry, establishing a food giant with a market value of approximately $65 billion.
According to the terms of the deal, McCormick will acquire Unilever’s food business for $44.8 billion in cash and stock. This transaction will combine Unilever’s food brand lineup including Hellmann’s, Knorr, and Maille with McCormick’s approximately $20 billion business, which includes products like French’s mustard, Old Bay seasoning, and Cholula hot sauce.
The agreement excludes certain assets, including Unilever’s business in India.
Unilever shareholders will hold 55.1% of the merged company, with Unilever’s parent company retaining 9.9% – meaning Unilever and its shareholders will collectively own 65% of the diluted merged company’s shares. Based on McCormick’s average stock price of $57.84 over the past month, this share is valued at approximately $29.1 billion.
Additionally, McCormick will pay Unilever $15.7 billion in cash (subject to final adjustment upon completion). This fund will be used to offset one-time spin-off and tax costs, and support the group’s $6 billion share buyback plan scheduled to be implemented from 2026 to 2029.
McCormick shareholders will hold 35% of the company’s shares.
The company post-merger will retain the name “McCormick”. McCormick CEO Brendan Foley will continue as the top executive, with the company’s headquarters remaining in Hunt Valley, Maryland. McCormick will establish its international headquarters in the Netherlands, where Unilever Foods had its long-term headquarters, and conduct a secondary stock listing in Europe.
After the transaction is completed, Unilever will appoint four out of twelve directors in the merged company. One of the directors in the first two years will be held by a Unilever executive.
Both parties anticipate that the transaction will be completed by mid-2027, pending approval from McCormick shareholders and regulatory authorities. After the merger is finalized, the new company is expected to achieve a 3% to 5% sustainable organic sales growth.
Unilever stated that this transaction will utilize a “Reverse Morris Trust” structure to benefit from tax advantages. Unilever CEO and incoming McCormick co-financial advisor Fernando Fernandez highlighted that this is the largest RMT transaction involving a European company.
This deal is part of Unilever’s ongoing cost-cutting plan implemented in 2024, aiming to save approximately €800 million (around $920 million) within three years.
Rothschild described this merger as another step in “streamlining” the company’s business portfolio in order to focus more on faster-growing sectors like beauty and personal care. He added that Unilever plans to gradually reduce its stake in this newly established food company in an orderly manner over time.
Post the divestment of the food business, Unilever is expected to maintain a revenue of €39 billion for the fiscal year 2025.
This agreement marks the largest strategic move made by Fernandez since he assumed the role of Unilever CEO in March 2025. In December 2025, he had already divested the ice cream business worth billions of euros under Unilever – which included brands like Talenti, Klondike, Ben & Jerry’s, and Magnum.
The company sold its tea business, including Lipton, in 2021 and separated Country Crock and other spreads business in 2017.
The separation of the food business not only further distances Unilever from direct competition with major packaged food rivals like Kraft Heinz, Nestle, and PepsiCo but also strengthens its positioning as a household products, beauty, and personal care company – its flagship products include Dove soap, Cif cleaning products, and Axe deodorant.
Unilever was created nearly a century ago through the merger of the Dutch margarine maker Margarine Unie and the British soap maker Lever Bros. In recent years, the company has been continuously disposing of slow-growing food assets.
This deal between Unilever and McCormick further confirms the widespread trend of packaged food and beverage companies streamlining operations through divestments and business separations to address slowing sales growth.
In September 2025, Kraft Heinz announced plans to split into two independent publicly traded companies, reversing the merger that created the existing company, valued at $23 billion in 2015. Kraft Heinz stated that the split aims to simplify the operational structure and allow the two companies to focus more effectively on their growth strategies. However, the plan was put on hold in February.
Keurig Dr. Pepper is pursuing a similar split. In August 2025, after acquiring the parent company of Peet’s Coffee, the company announced plans to split into two entities, one focusing on soft drinks and the other on coffee. This effectively dismantles the 2018 merger of Keurig and Dr. Pepper Snapple, which formed one of North America’s largest beverage companies.
While strategically important, some investors and analysts have raised doubts about the structure of this deal, leading to a 3% drop in Unilever’s stock price, hitting a nearly one-year low, and a 9% plunge in McCormick’s stock price at Wall Street’s opening.
James Edward Jones, an analyst at RBC, questioned strong brands like Knorr and Hellmann’s. He questioned, “Why would Unilever offer a premium for extremely low control rights, selling a business with two 100% owned brands and leaving shareholders with just a convoluted food business at 55%?”
Jones also added, “While this integration will indeed make Unilever a purely household and personal care company, we believe this is not the smoothest path to achieve this goal.”
However, Chris Beckett, a consumer products analyst at Quilter Cheviot, who is an investor in Unilever, holds a positive view, stating: “This deal is transformative for McCormick and an evolutionary change for Unilever. McCormick gains global scale and distribution in the seasoning field and is poised to drive better sales growth through Unilever’s brand leverage.”
Harsharan Mann, portfolio manager at Aviva Investors, a Unilever shareholder, stated: “Given the sluggish sales of the food business in recent years, the sale of the food business is a logical move.”
She added that considering the tax controversies similar M&A cases have faced in recent years, using the RMT model is a “wise move” as companies like P&G have successfully utilized this tax-free structure to dispose of non-core businesses.