McCormick Deal Creates a $60B Food Goliath

Spice and flavorings company McCormick announced on Tuesday that it's combining with Unilever's foods division, which includes household names like Hellmann's, Knorr, and Marmite. The combined company will maintain McCormick's name and leadership, reports the AP. But upon closing, Unilever shareholders are still expected to own 55.1% of the food company, as well as 9.9% in outstanding equity, while McCormick shareholders will own 35.%. Unilever and McCormick confirmed they were in talks about a deal last month, with Unilever attempting to streamline its business and focus on beauty and personal care products. Unilever spun off its ice cream portfolio late last year, notes CNBC.

McCormick and its red-capped array of spices is a $15 billion company, and the stable of brands it's adding from Unilever are valued at $45 billion, notes the Wall Street Journal, creating a $60 billion food behemoth. The transaction announced Tuesday excludes Unilever's food business in India, Nepal, and Portugal. McCormick CEO Brendan Foley said in a statement that the deal "accelerates McCormick's strategy and reinforces our continued focus on flavor." He added that McCormick has "long admired Unilever's foods business, which has a "portfolio that complements our existing business, capabilities and long-term vision." Shares of both companies rose slightly before the opening bell Tuesday.