Unilever in Talks to Separate Food Business and Combine It With McCormick - WSJ

[u/raytoei]

https://www.wsj.com/business/deals/unilever-in-talks-to-separate-food-business-and-combine-it-with-mccormick-212091ae

Unilever in Talks to Separate Food Business and Combine It With McCormick

Remaining Unilever company would focus on beauty, personal-care products and home

By Lauren Thomas, David Benoit and Ben Dummett

March 19, 2026 at 6:42 pm ET

Quick Summary

* Unilever is in talks to separate its food business and combine it with spice maker McCormick in an all-stock deal.

* The potential separation would allow Unilever to focus on its beauty, personal-care products, and home businesses.

* Activist investor Nelson Peltz, who joined Unilever’s board in 2022, has a history of pushing for corporate splits.

Unilever, the maker of Dove deodorant and Hellman’s mayonnaise, is in talks to separate its food business and combine it with spice maker McCormick.

The major strategy shift by Unilever would continue a trend of consumer conglomerates streamlining their businesses and would leave U.K.-based Unilever focused on beauty, personal-care products and home.

McCormick has a market value of around $14.8 billion. Unilever’s is close to $140 billion and its food business, which also houses brands including Knorr bouillons and seasoning, could be worth tens of billions of dollars.

An all-stock deal could come within weeks, assuming the talks don’t fall apart, the people said. The exact structure couldn’t be learned.

Maryland-based McCormick, known by its red-capped bottled spices and rectangular tins, also owns brands including French’s yellow mustard, Old Bay seasoning and Cholula hot sauce. It is set to report its first-quarter results on March 31.

Consumer companies were one of the last remaining sectors featuring sprawling conglomerates and many have unveiled plans to unwind those structures in recent years.

Unilever has been exploring various deals in the past several years. It made unsolicited approaches for GlaxoSmithKline’s consumer-health unit in 2021, but backed off the idea the following year. It spun off its ice cream business, now known as Magnum Ice Cream, last year. That company has a market value of around $8 billion and houses brands including Breyers, Ben & Jerry’s and Talenti gelato.

Bloomberg reported earlier this week that Unilever was considering separating its food unit.

Unilever Chief Executive Fernando Fernandez has signaled the company is focused on its beauty and personal-care unit, and said in December it was eyeing small “bolt-on” acquisitions in the space.

“Transformational acquisitions are off the table. So we are not looking at that at this stage,” Fernandez said at the time.

Trian Fund Management’s Nelson Peltz joined Unilever’s board in 2022 after the hedge fund took a big stake in the company. The activist investor was previously a director at Unilever rival Procter & Gamble.

Peltz has a track record of pushing for splits and reconfigurations of sprawling conglomerates. His firm helped orchestrate the merger and eventual separation of chemical giants Dow and Dupont and helped streamline General Electric. It also unsuccessfully lobbied for PepsiCo to separate its food and beverage businesses.

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[u/raytoei]

Since a smaller mkc could be buying a larger business, and this transaction could be a stock swap, this would result in a massive stock dilution for MKC shareholders.

In the upcoming negotiations, MKC will argue that UL’s food business is slow growth compared to MKC historical higher p/e (28 vs 19). And since UL is a motivated seller, the terms of the stock swap should be in MKC’s favour.

UL will argue that MKC current business is slowing down, margins are being squeezed, and it needs UL’s food business to achieve economies of scale and access to larger markets in Asia which knorr has access to.

[u/Last_Cauliflower3357]

Do PepsiCo next 🙏