London, May 9, 2026, 14:06 BST
Some Unilever PLC investors are pressing for the foods group being created with McCormick & Co. to keep tougher forestry and sustainability standards, putting a new governance question over the $65 billion transaction.
The pressure matters now because McCormick would take charge of a much larger food supply chain, with more exposure to agriculture, commodities and smallholder farming. Those are areas where environmental, social and governance standards — ESG, investor shorthand for non-financial risks such as climate, labour and board oversight — can turn into legal, reputational and financing problems.
The concern comes weeks after Unilever and McCormick agreed to combine Unilever Foods with the U.S. spice and sauces maker. The combined company would include Hellmann’s, Knorr, McCormick, Cholula, Maille and Frank’s, with about $20 billion of 2025 revenues, while Unilever would be left as a €39 billion home, personal care, beauty and wellbeing group.
Vemund Olsen, senior analyst at Norwegian asset manager Storebrand, told Reuters his firm would seek assurances around “deforestation-free sourcing” of commodities. A spokesperson for Germany’s Union Investment, a top-40 investor in both companies according to LSEG data, also sought transparency on how sustainable practices would be integrated. Reuters
The ask is specific: no sourcing from deforested or converted land, a public complaint process and traceability back to plantations. Unilever says 97% of its palm oil, paper and board, tea and soy purchase volumes were deforestation-free at the end of 2025 under its own requirements.
McCormick is not starting from zero. Its website says it set a goal in 2017 to source all herbs and spices sustainably, starting with black pepper, cinnamon, oregano, red pepper and vanilla by 2025; it also names palm oil, rice, soy and wheat as agricultural commodities with significant environmental impact.
Still, Hannah Schalk, an analyst at ESG ratings firm Sustainalytics, classified McCormick as “medium-risk” on sustainability and said its reporting gives less detail on traceability, auditing and certification. Cailin Dendas of shareholder group As You Sow warned that a retreat from sustainability could create “significant risk” for shareholders. Reuters
McCormick said it could not comment on future targets but was carrying out a strategic update of its sustainability programme. Unilever said it was working with McCormick before completion to support the transition of its Foods-related sustainability programmes and commitments.
The deal gives Unilever some leverage, though not full control. At closing, Unilever shareholders would own 55.1% of the combined company, McCormick shareholders 35.0% and Unilever itself 9.9%; Unilever would appoint four of 12 directors. Completion is expected by mid-2027, subject to McCormick shareholder and regulatory approvals.
Unilever CEO Fernando Fernandez described the transaction in March as part of “sharpening our portfolio.” McCormick CEO Brendan Foley said integrating two organisations of that size would require “disciplined execution.” Unilever
For Fernandez, the point is to narrow Unilever. The food and ice cream exits leave it more directly measured against consumer-goods and beauty rivals such as Procter & Gamble and L’Oréal, instead of straddling slower packaged-food lines and faster-growing personal care brands.
But the risks are not small. Unilever’s own deal materials warn that the transaction may be delayed or may not close if approvals or other conditions are not met; earlier Reuters coverage also cited investor worries over the structure, the long completion timeline and possible antitrust scrutiny.
The operating backdrop gives Fernandez some room, though not much. Unilever reported 3.8% underlying sales growth in the first quarter — a measure that strips out currency moves, acquisitions and disposals — with 2.9% volume growth and 0.9% price growth; turnover fell 3.3% to €12.6 billion, hit by currencies.
London trading was shut for the weekend at the dateline. Unilever’s U.S.-listed shares last traded at $58.40 on Friday, down 34 cents, while McCormick last traded at $48.32, up 41 cents.
The next tests are McCormick’s shareholder vote, regulatory reviews and the companies’ sustainability update. For Unilever, the trade is clear enough: it gets a cleaner portfolio, but the forestry question follows the foods business out the door.
