A “global flavor powerhouse” is brewing in Hunt Valley.
McCormick & Co., the longtime spice company, has regularly added brands in recent years. But it made a huge splash Tuesday by acquiring the bulk of Unilever’s food business and nearly tripling in size.
Unilever, a British consumer packaged goods conglomerate, will combine its food brands such as Hellmann’s mayonnaise under the McCormick name. The company will remain headquartered in Baltimore County with an international base in the Netherlands.
“McCormick will be McCormick,” McCormick President and CEO Brendan Foley said on an earnings call Tuesday. “Grounded in 137 years of leadership and guided by a passion for flavor.”
Foley, speaking on the call alongside Unilever CEO Fernando Fernández, called the combined company a “powerhouse” and described Tuesday as a “major milestone.”
“We have long thought about this combination,” Foley said.
The combined company is expected to generate more than $20 billion in annual revenue — significantly more than McCormick’s $6.8 billion last year. Once the transaction closes next year, Unilever and its shareholders will have a roughly 65% stake of the company, with McCormick shareholders owning 35%. Unilever will receive about $15.7 billion in cash from McCormick.
Foley will remain as president and CEO of the combined company, and McCormick chief financial officer Marcos Gabriel will continue in his position. Unilever will hold four of the combined company’s 12 board seats.
Large acquisitions often generate overlap in operations, and it’s unclear what consequences could be in store for the two companies’ employees. On Tuesday’s earnings call, the executives touted $600 million in “cost synergies.”
“In terms of the jobs impact of the transaction, it’s too early to provide an accurate answer but nothing is changing in the near term,” McCormick spokesperson Sabrina Negron wrote in an email.
McCormick had 14,100 employees worldwide as of last year. Foley said the combined company would “unlock” growth across its products, naming Cholula and Frank’s RedHot, as well as Unilever’s Maille, a French condiments brand.
He also pointed to advantages in distribution and in research and development.
Unilever spun off its ice cream business, including Ben & Jerry’s, last year. Tuesday’s mammoth deal leaves the company as a more streamlined beauty and personal care brand.
Meanwhile, it accentuates a trend for McCormick, which has been acquiring companies for much of its history.
The founder, Willoughby McCormick, began selling spices out of a Baltimore cellar in 1889. By the middle of the next century, the company had expanded to the West Coast.
It regularly brought brands on board — including Unilever’s Lawry’s seasonings in 2008. McCormick acquired Frank’s RedHot and French’s mustard in 2017, and Cholula and flavor company Fona International in 2020.
Tuesday’s deal, however, eclipses them all: Unilever has dozens of food brands including Marmite and Knorr.
“Just about every McCormick CEO we have met in the past 24 years has told us that they hoped Unilever would sell them their Knorr bouillon brand and perhaps other condiments in their portfolio,” TD Cowen analysts wrote in a March 20 note. “This transaction goes even farther than that.”
McCormick first entered the Fortune 500 list, which is ranked by annual revenue, in 2021, but narrowly missed out last year.
Already one of the largest public companies in Maryland, the acquisition would likely position McCormick among the 250 largest in the country.
