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Unilever and McCormick have reached an agreement: the FMCG multinational is selling the majority of its food division to the American spice manufacturer. The international headquarters of the new merged company would remain in the Netherlands.
Headquarters in the Netherlands
It had already become known earlier this month that the two companies were in talks. Now a deal has been reached: Unilever is selling its food division to McCormick for $44.8 billion (€39 billion)—excluding operations in India and a few other units. In exchange for the sale, Unilever will receive $15.7 billion in cash and a combination of McCormick shares with and without voting rights valued at $29.1 billion. This will allow it to retain a stake of approximately 9.9% in the new merged company, which will generate annual revenue of $20 billion (€17.4 billion).
Both parties expect the deal to close in the middle of next year. Approvals are still required from competition authorities and McCormick’s shareholders. Brendan Foley is expected to remain as chairman, president, and CEO of McCormick. Upon completion of the transaction, Unilever will appoint four of the twelve members of the merged company’s board of directors. The international headquarters would remain in the Netherlands.
Seasoning giant
Unilever has been looking for a solution for its food division, which includes well-known brands such as Knorr and Hellmann’s, for some time. The multinational increasingly wants to position itself as a group focused on beauty, personal care, and wellness. These categories offer more growth potential and higher margins than food. The company took its ice cream division public as The Magnum Ice Cream Company and has already divested several non-core food businesses in recent years, including the tea division, margarines, and brands such as The Vegetarian Butcher, Conimex, and Unox.
McCormick is one of the world’s largest spice producers, with brands such as Ducros, Cholula, El Guapo, Club House, French’s Mustard, and Frank’s RedHot. The company generates approximately $7 billion (€6.05 billion) in revenue across 150 countries.
