LONDON, April 1, 2026, 13:08 BST
Unilever PLC said on Tuesday it would merge its food business with McCormick in a $65 billion transaction, the British consumer group’s biggest portfolio move under Chief Executive Fernando Fernandez. The deal would move brands such as Knorr and Hellmann’s into a combined food company and leave Unilever focused on household and personal care. 1
The move matters because it strips out a business that generated 12.9 billion euros ($14.8 billion) of sales last year, more than a quarter of group revenue, yet grew only 2.5% and lagged the rest of Unilever. Investors have pressed the company for years to simplify the portfolio and lean harder into faster-growing beauty and personal care categories. 2
Under the agreement, Unilever and its shareholders will own 65% of the combined company, with Unilever itself holding 9.9%, while the group receives $15.7 billion in cash to cut debt and fund 6 billion euros of share buybacks through 2029. The transaction uses a Reverse Morris Trust — a U.S. structure that lets a company spin off a business and merge it in a tax-efficient way — and is expected to close by mid-2027; Fernandez called it “another decisive step,” while McCormick boss Brendan Foley said it would create a “diversified flavour leader.” 3
But markets were not convinced. Unilever shares fell 7% after the announcement, erasing about $7 billion of market value, while McCormick dropped about 5%; Chris Beckett at Quilter Cheviot warned the structure left a large ownership block hanging over shareholders, and RBC analyst James Edward Jones said it was “hardly a clean exit.” Former FTC chair Bill Kovacic told Reuters the deal was likely to face close U.S. antitrust scrutiny because it touches prices paid by consumers. 4
Not every investor is pushing back. David Samra of Artisan Partners, Unilever’s ninth-largest shareholder, said the deal would “more logically separate” food from personal care and argued the remaining company should command a higher earnings multiple because it operates in faster-growing, more profitable categories. 5
Labor is another test. Unilever’s European Works Council, which represents nearly 20,000 workers in Europe and Britain, said uncertainty was high and warned that if protections were not found for affected staff, the dispute could move from negotiations to strikes; Unilever said it would begin consultations as soon as possible. 6
In practical terms, the reshaped group would sit closer to Procter & Gamble and Reckitt, whose published business mixes are built around beauty, hygiene, health and home products rather than pantry staples. For McCormick, the transaction is more transformative, giving the spice maker broader global reach in condiments and seasonings at a time when scale still matters in a slow-growth food market. 7
The pressure around the deal goes beyond strategy. Reuters reported on Monday that Unilever had imposed a global hiring freeze for at least three months, citing disruption from the Middle East war, on top of a cost-cutting plan aimed at saving 800 million euros by 2027. That leaves Fernandez trying to recut the company at a moment when freight, energy costs and consumer demand are all under strain. 8
