Unilever–McCormick deal – summary
- Unilever and McCormick advance talks on major tax‑efficient food spin‑off
- Reverse Morris trust structure seeks to avoid triggering capital gains taxes
- Unilever considers carving out food unit valued near thirty five billion
- Combined entity could reshape global flavour market and influence retail channels
- Industry rivals may accelerate acquisitions or innovation efforts to protect share
Just last week, Unilever confirmed it had entered into talks over its Foods division, with US sauce and spice maker McCormick & Company, Inc.
Now, it seems those talks are becoming more advanced, with Reuters reporting McCormick has said it would offer the British group’s shareholders a majority stake in the new entity, and tax benefits.
According to “two people familiar with the matter" Unilever and McCormick are structuring the proposed deal in a way that would give shareholders in the London-listed group more than 50% of the combined company, while avoiding a so-called change in control that would trigger capital gains taxes.
The proposed deal would involve spinning-off Unilever’s food business before selling it to Maryland-based McCormick. It would be arranged like a so-called reverse Morris trust (RMT), which saves on taxes.
Furthermore, the unidentified sources claim talks are progressing quickly.
Unilever is reportedly working with Goldman Sachs and Morgan Stanley, with PwC also advising on the potential separation.
Meanwhile, investment banks Citi and Rothschild are advising McCormick.
Unilever and McCormick
Based in Maryland, McCormick holds a market value of around $14.51bn (€12.54bn), while London-based Unilever is valued at more than $134bn (LSEG Data and Analytics). However, its Foods division is valued at between $32bn and $35bn (including debt) according to Barclays.
If a deal does go through, it will bring iconic brands including Unilever’s Hellmann’s mayonnaise and McCormick’s Cholula hot sauce under one roof.
This latest development follows a string of high-profile sell-offs by London-based Unilever, including Unox, Zwan, Graze, and its entire ice cream business.
What a Unilever–McCormick deal could mean for packaged food
If the deal proceeds, it would mark one of the biggest restructurings in the packaged foods landscape in recent history.
For the broader industry, the move highlights accelerating consolidation as legacy manufacturers refocus on core strengths and divest lower‑growth or operationally complex units.
Unilever’s willingness to carve out a sizeable, globally recognised food portfolio signals a strategic pivot towards higher‑margin categories – primarily beauty, wellbeing, and homecare.
A combined entity would instantly become a powerhouse in the global flavour and dressings market, with the scale and brand mix to exert significant influence across both retail shelves and foodservice channels.Competitors may feel pressured to respond – either by expanding their flavour portfolios, accelerating M&A activity, or sharpening innovation pipelines to defend share in an increasingly concentrated category.
Unilever and McCormick are yet to respond to request for comment.
