LONDON, March 31, 2026, 12:06 (BST)
- Unilever said it is in advanced discussions with McCormick on a deal involving most of its Foods business, and an agreement could be reached on Tuesday. 1
- The outline on the table includes about $15.7 billion in cash and would leave Unilever and its shareholders with 65% of the combined company. 1
- Unilever’s India food operations would be excluded, and the company said there is still no certainty a transaction will be agreed. 1
Unilever said on Tuesday it was in advanced talks to combine most of its Foods business with McCormick in a transaction that could create a group worth more than $60 billion. The London-based company said work was still under way and an agreement could be reached later on Tuesday, though it cautioned that talks could still fail. 2
That is the clearest signal yet that chief executive Fernando Fernandez is ready to press ahead with his biggest portfolio move since taking over in March 2025. A deal would move Unilever further away from slower-growing packaged food and deeper into beauty, personal care and home products, the areas it has been trying to build into a faster-growth core. 2
The timing matters. Unilever made the disclosure a day after Reuters reported the group had imposed a global hiring freeze for at least three months, citing the widening Middle East conflict and the strain it could put on the business, leaving investors to judge a major restructuring against a rougher operating backdrop. 3
Under the outline disclosed by Unilever, the deal would be structured as a Reverse Morris Trust — a format in which a company spins off a business and then merges it with another group in a way intended to be tax-free for U.S. federal income tax. Unilever said it would receive roughly $15.7 billion in cash, exclude its India food operations and leave Unilever and its shareholders owning 65% of the combined company. 1
Foods is hardly a scrap pile. The division generated 12.9 billion euros of sales last year, more than a quarter of group revenue, and its 22.6% operating margin beat Unilever’s overall level, but growth was just 2.5%, below the rest of the business and short of the group’s 4%-6% sales target. 4
Harsharan Mann, a portfolio manager at Unilever shareholder Aviva Investors, said there was logic in disposing of Foods after years of muted volumes and called the structure sensible. He pointed to Procter & Gamble as a consumer peer that has used the same route to dispose of non-core assets in a tax-efficient way. 2
Other analysts liked the industrial fit, even if the mechanics look messy. TD Cowen’s Robert Moskow said the tie-up had “strong strategic logic,” while GlobalData’s Neil Saunders said McCormick had the operational expertise to absorb Unilever’s food brands. 5
McCormick, for its part, reported first-quarter results on Tuesday showing net sales up 16.7%, organic sales up 1.2% and a reaffirmed full-year outlook. The update landed the same day Reuters reported the company was nearing a far larger transaction with Unilever. 6
But the risk sits in execution. JPMorgan analysts said investors will need more detail on synergies and stranded costs — overhead that stays behind after a unit is carved out — and M&A consultant Davis Householder said the harder job would be separating supply chains, distribution and brand support without leaking value. 2
If the talks break down, the pressure does not disappear. Reuters reported earlier this month that investors were already questioning whether another major separation could distract management so soon after the ice cream spin-off, and March talks with Kraft Heinz over a different food combination had already ended without a deal. 4
For now, Unilever has told the market only that the finish line may be close. A signed deal would redraw the company again and give McCormick access to brands such as Hellmann’s and Knorr; a miss would reopen the market debate over whether the food unit should be sold, spun out or left where it is. 2
