McCormick & Company, Incorporated (MKC.US) confirmed a $4.48 billion acquisition of Unilever PLC Sponsored ADR (UL.US)'s food business, creating a global seasoning giant.

McCormick & Company, Incorporated confirmed on Tuesday morning that it has reached a merger agreement with the food business of Unilever PLC Sponsored ADR (excluding the Indian business and other divested businesses). The company stated that the transaction will create a global seasoning leading enterprise in attractive and high-growth categories, with an estimated total revenue of approximately $20 billion for the fiscal year 2025. Under the terms of the agreement, Unilever PLC Sponsored ADR and its shareholders are expected to receive 65.0% of the diluted common stock of the merged company, valued at approximately $29.1 billion based on the one-month volume weighted average price of McCormick & Company, Incorporated. Unilever PLC Sponsored ADR will also receive $15.7 billion in cash, subject to certain closing adjustments. These terms imply that the enterprise value of Unilever PLC Sponsored ADR's food business is approximately $44.8 billion, equivalent to about 13.8 times the fiscal year 2025 EBITDA. After the completion of the transaction, Unilever PLC Sponsored ADR shareholders are expected to hold 55.1% of the diluted common stock of the merged company, McCormick & Company, Incorporated shareholders will hold 35.0%, and Unilever PLC Sponsored ADR itself is expected to hold 9.9%. The transaction is expected to not impose a federal income tax burden on Unilever PLC Sponsored ADR or its shareholders, thereby reducing the overall tax costs associated with the transaction to some extent. This merger will bring together two industry-leading companies that are highly complementary in terms of geographical footprint and brand portfolio, covering various categories such as herbs, spices, seasonings, cooking aids, sauces, and condiments. The merged company will benefit from the extension of global reach, the scale of retail and foodservice channels, and increased resources for innovation, brand building, and global distribution. Unilever PLC Sponsored ADR CEO Fernando Fernandez emphasized, "This transaction is another decisive step in optimizing our portfolio, accelerating our strategic pivot to high-growth categories, and will position us as a company with 39 billion in revenue, dedicated to the health and personal care business, and with a leading track record of growth. We are unlocking undervalued value through a growth-focused food business spin-off, creating a global seasoning giant with scale advantage. By combining the iconic leading brands and global reach of Unilever PLC Sponsored ADR's food business with McCormick & Company, Incorporated's excellent product portfolio, category expertise, and capabilities, we will establish a focused, high-quality leading enterprise with significant revenue and value creation potential." Unilever PLC Sponsored ADR's food business has a global product portfolio covering seasonings, cooking aids, sauces, and other foods, with its iconic brands Knorr and Hellmann's contributing to approximately 70% of sales. Knorr is well-known in over 90 countries globally, serving more than 5 billion consumers; Hellmann's, as one of the world's leading mayonnaise brands, reaches consumers in 65 countries. In addition to these strong global brands, Unilever PLC Sponsored ADR's food business has a broad portfolio of local brands in Europe, the Middle East and Africa, Latin America, and the Asia Pacific region. With sustained and robust sales growth, this business achieved a compound annual growth rate of approximately 2.8% over the past two years. The assets of Unilever PLC Sponsored ADR's food business are highly complementary to McCormick & Company, Incorporated's iconic brand portfolio, including McCormick, French's, Frank's RedHot, Cholula, Stubb's, OLD BAY, Lawry's, etc., with a history of providing seasoning products for various cuisines and trends for 137 years.