Unilever, McCormick strike deal to create $65b food giant

LONDON, April 1 (Reuters): Unilever will merge its food business with spice maker McCormick, it said on Tuesday, creating a company worth around $65 billion in the second-largest food transaction in history.

The agreement is CEO Fernando Fernandez's biggest gambit since taking the helm in March 2025 and comes after he completed the spin-off last year of Unilever's multi-billion euro ice cream business, home to Ben & Jerry's and Magnum. Though Unilever's food unit is a high-margin business, sales growth has lagged, the company's personal goods and beauty businesses and weighed on its ambition to increase overall group sales by 4 per cent-6 per cent in the near term.

Investor pressure to shed food brands increased after it was revealed in 2022 that billionaire activist-shareholder Nelson Peltz had built a stake in Unilever. Peltz has been linked to the departure of former CEOs Alan Jope and Hein Schumacher, with Fernandez, Unilever's former finance chief and a veteran beauty and wellbeing executive, promoted to focus on streamlining the company's portfolio. Still, Unilever shares fell 3 per cent to a nearly one-year low with investors and analysts criticising the deal's structure, while McCormick shares tumbled 9 per cent as Wall Street trading opened.

"Why is Unilever disposing of a business dominated by two brands, of which it owned 100 per cent, for a minimal control premium and leaving its shareholders with a 55 per cent shareholding in a sprawling food business?" RBC analyst James Edward Jones said, referring to Knorr stock cubes and Hellmann's mayonnaise.