Unilever PLC and the US-based McCormick & Company today announced that they have entered into an agreement to combine Unilever’s Foods business with McCormick to create a $65-billion giant. The deal values McCormick’s business at $21 billion and Unilever's food division at $44.8 billion.

Fernando Fernandez, CEO of Unilever, said, “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.” He added that by retaining ownership stake, Unilever is showing its conviction in the strength of the combined company.

The combined business will house leading, iconic brands including McCormick, Knorr and Hellmann’s, and high growth potential brands including Cholula, Maille and Frank’s, as part of a global portfolio with revenues of $20 billion.

Post-completion, Unilever will operate across beauty, wellbeing, personal care and home care, with leading positions in attractive categories, fast-growing geographies and channels through a portfolio of high-performing, innovative brands.

According to a press release, Unilever and its shareholders will receive, in aggregate, shares equal to 65.0% of the fully diluted combined company equity and Unilever will receive a cash payment of $15.7 billion upon closing of the deal.

Unilever shareholders will own 55.1% of the fully diluted combined company equity. Unilever will own a 9.9% stake, underscoring its support and confidence in the strategic merits, integration plan and execution of the combined company. Over time, and not earlier than one year after closing, Unilever intends to sell down its stake in an orderly and considered manner. McCormick shareholders will own 35.0% of the fully diluted combined company equity.

Brendan Foley, CEO of McCormick, commented: "Together, we will be better positioned to accelerate growth in attractive categories. This combination will create a diversified flavour leader with a robust growth profile that remains differentiated by its focus on flavouring calories while others compete for them.”

The merged entity will emerge as global flavour powerhouse anchored in a portfolio of iconic brands across herbs, spices, seasonings, cooking aids, sauces and condiments. It will bring together complementary geographic footprints and a global leading presence across both retail and food service channels, with deep science and R&D capabilities to meet consumers’ growing demand for flavour, states the release.

The combined company will be led by the McCormick CEO and CFO, with senior management representation from Unilever Foods. McCormick will retain its existing name; its Hunt Valley, Maryland global headquarters and NYSE listing. Besides, establishing international headquarters in the Netherlands and the US firm is planning a secondary listing in Europe.

The combined company expects to realise approximately $600 million of annual run rate cost synergies net of growth reinvestments; with full value expected to be achieved by the end of year three. Incremental cost and revenue synergies of $100 million will be reinvested to further drive growth.

The deal completion is expected by mid-2027, subject to McCormick shareholder approval, receipt of required regulatory approvals and the satisfaction of other customary closing conditions. Works Council consultation will also be conducted prior to closing of the transaction.