McCormick said on Tuesday that it will combine with Unilever’s foods division, which includes brands such as Hellmann’s and Knorr, in what it described as the latest reshaping of the packaged-food sector. The companies said the combined business would keep McCormick’s name and leadership, positioning the companies for growth while the industry contends with inflation and changing consumer tastes.
Under the deal terms announced March 31, Unilever and its shareholders are expected to own 65% of the combined company’s outstanding equity. McCormick shareholders are expected to own the remaining 35%, and Unilever would also provide $15.7 billion in cash as part of the transaction.
McCormick said the combination would give it better access to higher-growth regions including Latin America and Asia, where Unilever has an extensive presence. The company also said the deal would expand Unilever’s footprint in North America, where McCormick has a stronger profile.
Both companies said they expect to generate $600 million in annual cost savings. In a prepared statement, McCormick Chief Executive Brendan Foley said the combined company would be “better positioned to accelerate growth in attractive categories,” according to the companies’ disclosures.
The companies also said they expect to grow their presence in food service. They said Unilever has traditionally been stronger in restaurant kitchens, while McCormick’s products are often used more in the dining room—on tables.
The transaction is expected to close by mid-2027, pending approval from both shareholders and regulators. The companies said the deal excludes Unilever’s food business in India, Nepal and Portugal.
Unilever, headquartered in London, has previously shifted its portfolio away from food and toward beauty and wellness. In recent years, Unilever announced it was spinning off its ice cream business, which included Ben & Jerry’s, Magnum and Breyers, and it later sold its Vegetarian Butcher plant-based meat brand and Graze healthy snacking brand.
The announcement came as packaged food companies deal with changing consumer behavior, including a shift toward cheaper store brands or less-processed foods. Unilever said its food sales make up one-quarter of its total sales and fell by 3% last year, while McCormick said spices and flavors have remained resilient; it reported net sales grew 2% last year.
Investors reacted to the announcement with Unilever shares falling 6% Tuesday afternoon and McCormick shares declining 5%. Max Gumport, a senior analyst for BNP Paribas Equity Research, said in a note to investors that McCormick has a strong track record with previous acquisitions, while also saying investors were likely concerned about the merger’s complexity and the high number of recent deals in the food industry.