Unilever in talks to sell food business to US rival McCormick

By Yadarisa Shabong and Lisa Jucca

March 20 (Reuters) – Unilever is in talks to sell its foods business to smaller rival McCormick & Company, a potential deal that would unite the British company’s Hellmann’s and Knorr brands with the U.S. spice maker’s Cholula hot sauce.

London-listed Unilever said on Friday it had received an offer from McCormick, while McCormick confirmed it was engaged in discussions with Unilever regarding a potential strategic transaction involving the food business.

Shares in Unilever opened around 1% higher.

The talks mark a potential acceleration of Unilever CEO Fernando Fernandez’s plan to shift Unilever towards beauty and personal care categories following the spin-off of its ice cream business last year.

Unilever’s food business made up about a quarter of its total sales in 2025, generating more than 12.9 billion euros ($14.91 billion) last year.

But the business faces headwinds from a move away from processed foods. Politicians, ​including U.S. Health Secretary Robert ​F. Kennedy Jr, have warned about their health risks and while many consumers are turning to GLP-1 weight-loss drugs, which mean people eat less.

Analysts at Barclays estimated the enterprise value of Unilever’s food division, which has been growing more slowly than the company’s overall business, at between 28 billion euros and 31 billion euros.

McCormick’s market capitalisation is about $14.5 billion, much smaller than the potential value of Unilever’s food business. Unilever’s market cap is about $136 billion.

Tineke Frikkee, a portfolio manager at W1M, a Unilever investor, questioned the value for investors of the potential deal.

“This potential deal seems complex, McCormick is much smaller than Unilever Food – Unilever Food generates around 3x the profit of McCormick – so unclear what value can be created as a combined entity, and what structure can be proposed that offers value to shareholders.”

The two companies said there was no certainty that a deal would be agreed. They provided no financial details.

McCormick’s offer was unsolicited, according to one person familiar with the situation.

The companies’ confirmation of the discussions came after the Wall Street Journal reported late on Thursday that Unilever was in talks to separate its food business and combine it with spice maker McCormick.

The Financial Times reported earlier this week that Unilever had unsuccessfully weighed merging its food assets with Kraft Heinz’s condiments business.

($1 = 0.8650 euros)

(Reporting by Yadarisa Shabong in Bengaluru and Lisa Jucca in Milan; Editing by Nivedita Bhattacharjee, Tomasz Janowski and Jane Merriman)