McCormick & Company (MKC), a spice and condiment producer, is close to reaching a merger agreement with Unilever’s (UL) food business, with the two parties expected to jointly form a new food industry giant valued at $60 billion. The deal could be officially announced as early as before the US stock market opens on Tuesday.
According to sources familiar with the matter, Unilever’s board of directors held a meeting on Monday afternoon local time to review the specific terms of the transaction. The deal involves a mix of cash and stock, and its timing is intended to align with the release of McCormick’s latest quarterly earnings report, though the plans remain subject to change. If the transaction is ultimately completed, Unilever shareholders are expected to hold approximately two-thirds of the equity in the newly established food company. The deal includes approximately $16 billion in cash consideration and is structured as a Reverse Morris Trust to maximize tax benefits.
This major strategic adjustment continues the prevailing trend among consumer goods giants to streamline their global business units. Upon completion of the transaction, UK-based Unilever will primarily focus on its beauty, personal care, and home care businesses.
Boosted by the news, McCormick’s stock rose nearly 4% in after-hours trading on Monday, while Unilever gained nearly 1%. Prior to this, the two companies’ stocks had fallen 20% and 8% respectively year-to-date.
This potential merger comes at a time when the packaged food industry is facing multiple headwinds, with industry valuations continuing to decline. Investors are concerned that persistently high inflation is squeezing corporate profit margins, while the widespread adoption of GLP-1 class drugs is also impacting food sales.
In a research report released on Monday, Deutsche Bank analyst Steve Powers warned: “In our view, steadily intensifying industry pressures and emerging challenges have been accumulating for some time and are gradually undermining the traditional assumptions that have supported the investment logic for US packaged consumer goods.” He noted that while some factors may be short-term or cyclical in nature, issues such as demographic inflection points and profound shifts in the balance of power within industry supply chains are more likely to have structural, long-term effects.
Major mergers and acquisitions in the industry in recent years also include: Mars’ completion of its approximately $35.9 billion acquisition of Kellanova in December 2025, integrating snack brands such as Pringles and Cheez-It with its own candy brands including M&M’s and Snickers; Campbell Soup Company’s (CPB) acquisition of the parent company of premium pasta sauce brand Rao’s for approximately $2.7 billion in March 2024; and Hormel Foods’ (HRL) purchase of the Planters nut brand from Kraft Heinz for $3.35 billion in 2021.
