Unilever PLC and McCormick & Company have confirmed that they are in active discussions to merge Unilever’s food business into McCormick through an all‑stock transaction that could be structured as a Reverse Morris Trust. The deal would value Unilever’s food division at roughly $33‑$34 billion, a figure that reflects the division’s €12.9 billion (≈$14.4 billion) revenue base and its 2.5 % underlying sales growth in 2025.
The transaction aligns with Unilever’s long‑term strategy to accelerate its focus on higher‑margin beauty, personal‑care and wellbeing categories. Unilever’s food division, which accounted for about a quarter of the company’s total revenue, grew at a slower pace than its personal‑care (4.7 %) and beauty (4.3 %) segments. Divesting the food business would free capital and management bandwidth to invest in the faster‑growing, higher‑margin parts of the portfolio.
For McCormick, acquiring Unilever’s food assets would more than double the company’s size and transform it into a global condiment and flavor powerhouse. The deal would add iconic brands such as Hellmann’s, Knorr, Frank’s RedHot and French’s Mustard to McCormick’s existing spice and seasoning portfolio, creating a diversified product mix that could drive cross‑selling and scale efficiencies.
The all‑stock structure would give Unilever shareholders a majority stake in the combined entity, while McCormick shareholders would receive a significant equity position in the enlarged company. The Reverse Morris Trust framework would allow the transaction to be tax‑efficient for both parties, but it also introduces integration challenges given the scale of the food business relative to McCormick’s current operations.
Unilever’s food division generated €12.9 billion in revenue in 2025, up 2.5 % from the prior year, and contributed to an overall operating margin of 20 % for the group. McCormick reported 2025 revenue of $1.85 billion, a 2 % increase from 2024, and an adjusted EPS of $3.00 versus $2.95 in 2024. The company’s gross margin of 37.9 % and net margin of 11.5 % reflect a modest decline in profitability, while a current ratio of 0.7 signals liquidity constraints that could affect financing the acquisition.
Analysts have responded to the announcement by adjusting price targets and ratings for McCormick, reflecting the potential upside from the expanded brand portfolio and the challenges posed by the size of the transaction. The market has also noted Unilever’s strategic shift away from a slower‑growing food segment toward higher‑margin categories, which is expected to influence the company’s future earnings trajectory.
The deal would accelerate consolidation in the food and condiment sector, positioning the combined entity to compete more directly with Kraft Heinz and Nestlé. Regulatory approval will be required, and the transaction’s success will depend on McCormick’s ability to integrate a large, complex business while maintaining its existing operational efficiencies.
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