Unilever Food Division: McCormick in $37bn Takeover Talks

Unilever Considers Sale of Food Division to McCormick in Potential Multibillion-Dollar Deal

Unilever, the consumer goods giant behind brands like Marmite and Hellmann’s, is exploring the sale of its food division to McCormick, the US-based spice and sauce maker. The potential deal, valued in the tens of billions of dollars, signals a continued shift by Unilever towards faster-growing beauty and personal care markets. Discussions are ongoing, and Unilever cautioned that a transaction isn’t guaranteed.

What’s Confirmed and What Remains Unclear

As of Friday, March 20, 2026, Unilever has confirmed receiving an offer from McCormick for its food business. This division includes well-known brands such as Marmite, Hellmann’s mayonnaise, and Pot Noodle. However, the specific financial terms of the offer, including the exact valuation, have not been disclosed. It remains unclear whether the two companies will reach a final agreement. Unilever stated that its board views the Foods business as “highly attractive” and is confident in its future performance, even remaining within the Unilever portfolio.

Unilever’s Strategic Shift: A Decade of Divestitures

This potential sale represents the latest step in Unilever’s decade-long strategy to streamline its portfolio and focus on higher-growth areas. Over the past ten years, the company has divested several of its slower-growing food businesses, including its spreads division, tea business, and ice cream division. This ongoing reshaping reflects a broader trend within the consumer goods industry, where companies are increasingly prioritizing focused portfolios and higher-margin categories. The company’s focus is now on beauty, home, and personal care brands.

McCormick’s Position and Potential Deal Structure

Maryland-based McCormick, with annual revenues of $7 billion and a market capitalization exceeding $14 billion, is a major player in the spice, seasoning, and sauce market. The company’s portfolio includes iconic brands like its signature spice blends, Cholula hot sauce, and French’s mustard. Analysts at Jefferies estimate the value of a standalone Unilever food business at $36 billion to $37 billion, based on an enterprise value-to-EBITDA multiple of 9.5 times.

One potential deal structure being discussed is a Reverse Morris Trust transaction. This complex arrangement would involve Unilever spinning off its food division and then merging it with McCormick. Such a structure could minimize tax implications and potentially allow Unilever shareholders to retain a majority stake in the combined entity. The attractiveness of this structure, however, hinges on the specific terms of the agreement.

Strategic Fit: Hellmann’s and McCormick’s Sauce Portfolio

Analysts highlight a strong strategic fit between Unilever’s Hellmann’s mayonnaise brand and McCormick’s existing sauce portfolio. Combining these complementary businesses could create synergies and strengthen both companies’ positions in the condiments market. Bernstein analyst Callum Elliott pointed to this synergy as a key factor in the potential deal’s appeal.

Past Merger Discussions: Unilever and Kraft Heinz

The current discussions with McCormick aren’t the first time Unilever has explored a combination of its food business with another major player. The Financial Times reported earlier this week that Unilever previously engaged in talks with Kraft Heinz regarding a potential merger of Unilever’s food division with Kraft Heinz’s condiments business. Those discussions ultimately did not result in an agreement, paving the way for the current negotiations with McCormick.

Roula Khalaf and the Financial Times’ Coverage

The unfolding story has been closely followed by the Financial Times, with editor Roula Khalaf highlighting the potential merger as a key story in her weekly editor’s digest. Khalaf, who succeeded Lionel Barber as editor in January 2020, is the first female editor in the Financial Times’ 131-year history. Her leadership has brought increased attention to major business developments like this potential deal.

What Happens Next?

The next steps involve continued negotiations between Unilever, and McCormick. Unilever’s board will need to carefully evaluate any formal offer to ensure it aligns with the company’s long-term strategic goals and delivers value to shareholders. Regulatory approvals will also be required in multiple jurisdictions, adding another layer of complexity to the process. Given the size and scope of the potential transaction, a definitive agreement could seize several months to finalize, if it is reached at all.