Unilever confirms offer for Foods arm from US-based McCormick
Unilever PLC on Friday confirmed it has received an inbound offer for its Foods business, and has entered talks with McCormick & Co Inc.
McCormick is a Hunt Valley, Maryland-based food ingredients and flavours company.
Unilever, a London-based consumer goods firm, commented: ‘The board believes Foods is a highly attractive business, with a strong financial profile led by market-leading brands in growing categories and is confident in the future of the Foods business as part of Unilever.’
Unilever shares rose 1.3% to 4,635.50 pence on Friday morning in London, for a market capitalisation of £101.62 billion. McCormick, whose market cap is around $14.51 billion, closed down 1.8% at $54.05 on Thursday in New York.
This follows a report from Bloomberg on Tuesday that Unilever was considering selling the Food division, as it shifts focus to its beauty, personal care and wellbeing offering.
Bloomberg’s sources indicated that Unilever was considering a Foods spin-off, or keeping some marquee brands while separating the rest, though the company may not pursue a deal before 2027.
Unilever on Friday stressed: ‘There can be no certainty that any transaction will be agreed.’
Should a deal proceed, it would follow the 18-month demerger of Unilever’s ice cream business into Magnum Ice Cream Co NV, which completed last year. Unilever has kept a stake of almost 20% in the frozen desserts business, which it will sell down over the coming years.
After the ice cream spin-off, the food division booked 2025 sales of €12.9 billion, just under 26% of total group sales of €50.5 billion and a 22.6% underlying operating profit margin, versus 20.0% for the group.
Together, Knorr stock cubes and Hellmann’s mayonnaise account for about 60% of all Unilever Food sales. Other key brands include Horlicks drink powder, Marmite and Bovril spreads, and Colman’s mustard.
Unilever had previously outlined plans to offload around €1.5 billion of local food brands in Europe.
On Wednesday, the Financial Times reported that Unilever had been in discussions with Kraft Heinz Co for a potential merger of their food brands. Those talks have since ended, according to the FT, but had concerned a combination of Unilever Foods and Kraft Heinz condiments.
For its part, Kraft Heinz, which has its headquarters in Chicago and Pittsburgh, back in September had disclosed plans to split its business in two.
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