HUNT VALLEY, MD. — McCormick & Co., Inc. has entered into an agreement to acquire much of Unilever PLC’s Food business unit. The combined company is expected to have approximately $20 billion in sales.
Under the terms of the agreement, Unilever and its shareholders are expected to receive shares equating to 65% of the fully diluted combined-company outstanding equity, equivalent to $29.1 billion based on McCormick’s one-month volume-weighted average price of $57.84. Unilever also will receive $15.7 billion in cash, subject to certain closing adjustments. The terms imply an enterprise value for Unilever Foods of approximately $44.8 billion.
Upon closing of the transaction, Unilever shareholders are expected to own 55.1%, McCormick shareholders will own 35% and Unilever is expected to own 9.9% of the fully diluted combined-company outstanding equity.
“This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavor,” said Brendan Foley, chairman, president and chief executive officer of McCormick & Co. “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. This combination will create a diversified flavor leader with a robust growth profile that remains differentiated by its focus on flavoring calories while others compete for them.”
Unilever Foods’ portfolio includes flavoring and cooking aids, condiments, sauces and other food products, led by brands like Knorr and Hellmann’s, which comprise approximately 70% of sales. Knorr is in more than 90 countries and serves more than five billion consumers worldwide, and Hellmann’s, a mayonnaise brand, reaches consumers in more than 65 countries, according to McCormick & Co.
Alongside the global brands, Unilever Foods’ portfolio includes an array of local brands across EMEA, Latin America and APAC.
Upon closing of the transaction, Brendan Foley is expected to remain chairman, president and CEO of McCormick, and Marcos Gabriel is expected to remain chief financial officer.
Unilever will appoint 4 of 12 members of the combined company’s board of directors. In addition, one Unilever executive is expected to serve as one of the four directors appointed for two years to support a successful integration.
McCormick said it will maintain its global headquarters in Hunt Valley and have an international headquarters in Rotterdam, the Netherlands.
