HUNT VALLEY, Md. – McCormick & Company, Inc.("McCormick") and Unilever ("Unilever"), have announced that they have entered into an agreement to combine McCormick with Unilever's Foods business excluding India and other excluded businesses ("Unilever Foods"), creating a global flavor leader in attractive and high-growth categories with approximately $20 billion in combined fiscal year 2025 revenue.
The combination brings together two industry-leading organizations with complementary global footprints and portfolios of iconic brands across herbs, spices, seasonings, cooking aids, condiments and sauces. The combined company is expected to benefit from expanded global reach, enhanced scale across retail and foodservice channels and greater resources to invest in innovation, brand-building and global distribution.
Brendan Foley, Chairman, President and Chief Executive Officer of McCormick, said, "This transformative combination accelerates McCormick's strategy and reinforces our continued focus on flavor. 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' global portfolio of strong brands, combined with our proven expertise in insight-driven brand-building and integration, will enable us to deliver flavor in new and exciting ways for more consumers, driving significant growth across the combined portfolio and value for all stakeholders. Integrating two global organizations 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."
Under the terms of the agreement and upon closing of the transaction, Unilever and its shareholders are expected to receive shares equating to 65.0% of the fully diluted combined-company outstanding equity, equivalent to $29.1 billion3 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 13.8x fiscal year 2025 EBITDA. In addition, this reflects an enterprise value for McCormick of approximately $21.0 billion, or approximately 13.8x fiscal year 2025 EBITDA.
Upon closing of the transaction, 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.
Fernando Fernández, Chief Executive Officer of Unilever, said, "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 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."
"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 flavor leader. Our retained ownership stake reflects our conviction in the strength of the combined company and its future prospects."
Unilever Foods has a global portfolio of flavoring and cooking aids, condiments, sauces and other food products, led by iconic brands Knorr and Hellmann's, which comprise approximately 70% of sales. Knorr, a household name in more than 90 countries around the world, serves more than five billion consumers worldwide, and Hellmann's, one of the world's leading mayonnaise brands, reaches consumers in more than 65 countries. Alongside these global power brands, Unilever Foods' portfolio includes a wide array of 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.
Unilever Foods' assets are a highly complementary fit with McCormick's portfolio of iconic brands, which include McCormick, French's, Frank's RedHot, Cholula, Stubb's, OLD BAY and Lawry's, and its 137-year history of flavoring foods for every cuisine and trend. 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.
