LONDON, April 2, 2026, 13:02 BST
Unilever PLC is pivoting sharply into beauty and home care, after sealing a $65 billion merger on March 31 that combines its foods unit with McCormick. The structure gives Unilever shareholders a controlling stake in the newly formed company. But dissent has emerged from investors and labor groups as the maker of Dove and Hellmann’s presses ahead with its plan to spin off the slower-moving food arm.
Timing matters. Unilever CEO Fernando Fernandez is now driving a plan to slim the company down into a sharper consumer-products player. Where earlier bosses attempted to shuffle brands and assets, Fernandez has put a freeze on hiring for no less than three months and is targeting 800 million euros in cuts. No one’s eager for a lengthy or messy spin-off right now.
Unilever plans to carve out a business it values at about $44.8 billion, opting for a Reverse Morris Trust structure that could trim U.S. tax exposure. The transaction brings in $15.7 billion in cash. When the dust settles, Unilever shareholders stand to hold 55.1% of the newly created company, while Unilever itself keeps a 9.9% slice. The buyback program swells to 6 billion euros, and management is targeting $600 million in annual cost cuts by year three post-close.
Fernandez described the move as “the right step at the right time,” pitching the split as a play for a “simpler, sharper, higher-growth Unilever.” After the separation, Unilever is aiming for roughly 39 billion euros in revenue, zeroing in on beauty, wellbeing, personal care, and home care. The food segment will roll into the McCormick brand, keeping its headquarters in Hunt Valley, Maryland, and a New York listing. Company forecasts put 2025 revenue for that business near $20 billion. Reuters
Unilever doesn’t treat food as an afterthought. Its food division generated 12.9 billion euros in sales last year, which made up more than a quarter of the company’s total revenue. The sale excludes businesses in India, Nepal, Portugal, and a few other segments. Growth, though, is where things have stalled. Food sales rose just 2.5% last year, falling well below Unilever’s 4% to 6% growth target. Shoppers steered toward fresher fare and cheaper store brands.
Supporters make their case. David Samra at Artisan Partners argues that with fewer brands, Unilever can “more effectively manage” core personal care and home products. Across at Ninety One, Will Nott frames the breakup as a step toward a richer valuation—he notes the food business has weighed Unilever down versus L’Oréal and Procter & Gamble for years. Reuters
McCormick isn’t buying into the prevailing mood. CEO Brendan Foley says the larger company will “continue to flavor calories while others compete for them”, betting that demand for spices and sauces will stick even as weight-loss drugs shake up consumer habits and the U.S. pantry market softens. The deal gives McCormick more exposure to emerging markets and strengthens its ties to foodservice customers like restaurants and caterers. Reuters
Still, obstacles are piling up. Unilever shares slid 7% on March 31 right after the announcement. Chris Beckett at Quilter Cheviot said bluntly, “the market, so far, has not reacted well.” Over in the U.S., former FTC Chair Bill Kovacic pointed to what’s likely to be heavy antitrust scrutiny. In Europe, Unilever’s works council—which speaks for nearly 20,000 workers across Europe and the UK, including about 4,800 in its food unit—warned that job cuts could set off strikes. The deal structure also drew fire from RBC analysts, who labeled it “hardly a clean exit,” since Unilever shareholders would still wind up with a large share of the food arm and the closing isn’t expected until mid-2027. Reuters
Fernandez is framing the deal as the final touch on a broader overhaul that began when Unilever carved out its ice cream business, aiming to hone its focus on beauty and home categories. The real hurdle? He’ll need to show investors—between now and mid-2027—that the plan’s narrative stands up to the gritty realities of execution.
