LONDON, April 1, 2026, 13:08 BST
Unilever PLC announced Tuesday plans to merge its food division with McCormick in a $65 billion deal—marking the largest shake-up under CEO Fernando Fernandez. Knorr, Hellmann’s, and other brands would shift to the new joint food entity, narrowing Unilever’s scope to household and personal care goods.
This shift pulls out a segment responsible for 12.9 billion euros ($14.8 billion) in sales last year—over a quarter of group revenue—but one that managed just 2.5% growth, falling behind other parts of Unilever. For years, investors have urged Unilever to streamline, with calls to double down on the higher-growth beauty and personal care space.
Unilever and its shareholders end up with 65% of the merged entity under the deal. The company itself hangs on to a 9.9% stake. Unilever’s getting $15.7 billion in cash—money pegged to trimming debt and bankrolling 6 billion euros’ worth of share buybacks by 2029. The tie-up relies on a Reverse Morris Trust, a U.S. mechanism for spinning off and merging businesses in a tax-advantaged fashion, and is set to wrap up by mid-2027. Fernandez described the move as “another decisive step.” Brendan Foley, CEO at McCormick, called the combination a “diversified flavour leader.” Unilever
Markets weren’t buying it. Unilever’s shares slid 7% following the news, wiping out roughly $7 billion in value. McCormick fell about 5%. Chris Beckett at Quilter Cheviot flagged concerns over a sizable ownership block left dangling above shareholders, while RBC’s James Edward Jones called the setup “hardly a clean exit.” Former FTC chair Bill Kovacic told Reuters the transaction would almost certainly draw close U.S. antitrust scrutiny, given its impact on what consumers pay. Reuters
But there’s not universal resistance. David Samra at Artisan Partners—Unilever’s ninth-biggest shareholder—sees logic in the move, saying it would make for a cleaner split between food and personal care. In his view, what’s left should fetch a richer earnings multiple, given its focus on faster-growing and more profitable segments.
Labor issues are looming. Unilever’s European Works Council, speaking for close to 20,000 employees across Europe and the UK, described the level of uncertainty as high and cautioned that without guarantees for workers, talks could give way to strikes. Unilever responded, saying consultations will start as soon as possible.
The realignment would nudge the group nearer to Procter & Gamble and Reckitt, companies whose reported business portfolios focus on beauty, hygiene, health, and home goods—not pantry staples. For McCormick, this deal changes the game, expanding the spice giant’s global footprint in condiments and seasonings while scale remains crucial in a sluggish food sector.
The deal’s pressure isn’t just strategic. On Monday, Reuters said Unilever slapped a global hiring freeze in place for at least three months, pointing to Middle East war disruption. That’s on top of a plan to shave 800 million euros off costs by 2027. Fernandez faces the task of restructuring the company while freight and energy bills bite and consumer demand wobbles.
