Merger will create ‘scaled, global powerhouse of flavour’ with revenues of $20 billion and portfolio of household food brands with vast produce buying power
FMCG multinational Unilever has separated and merged its foods business with spice maker McCormick.
The deal will be worth around $66bn (£49.8bn) and is the second-biggest food business transaction in history, according to Reuters.
Unilever Foods is a major global buyer of fresh produce including peas, herbs and tomatoes for its range of household brands, which include stock brand Knorr and Hellman’s.
The new merger will be a “scaled, global flavour powerhouse” built around a portfolio of brands across herbs, spices, seasonings, sauces and condiments, with revenues of $20bn a year. Unilever itself will focus on beauty, wellbeing and personal care.
“This is a combination built on strong strategic and cultural alignment, providing exciting opportunities for our people and ensuring our Foods brands continue to thrive as part of a global flavour leader,” said Unilever CEO, Fernando Fernandez.
“Our retained ownership stake reflects our conviction in the strength of the combined company and its future prospects,” he said.
“By combining Unilever Foods’ iconic leading brands and global reach with McCormick’s exceptional portfolio, category expertise and capabilities, we are establishing a focused, high-quality business with significant top line growth and value creation potential,” added Fernandez.
McCormick CEO, Brendan Foley, said: “The Unilever Foods business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision. Together, we will be better positioned to accelerate growth in attractive categories.
“Unilever Foods’ global portfolio of strong brands, combined with our proven expertise in insight-driven brand-building and integration, will enable us to deliver flavour in new and exciting ways for more consumers, driving significant growth across the combined portfolio and value for all stakeholders.”
Unilever Foods has been investing in regenerative farming within its fresh produce supply chain in recent years, including pea farming in France, which it sources for stock brand Knorr.
The company also buys an estimated six per cent of the world’s fresh tomatoes.
