Unilever is in active discussions over the future of its food division, with two potential counterparties now publicly identified. The Wall Street Journal first reported that McCormick, the Maryland-based spice and condiments group best known for its Cholula hot sauce and Frank's RedHot brands, had approached Unilever about combining the two companies' food assets. Unilever subsequently confirmed it had received such an offer.
The Financial Times reported separately that Unilever had also held talks with Kraft Heinz over a deal that would have brought together Unilever's condiments portfolio, including Hellmann's mayonnaise and Colman's mustard, with Kraft Heinz's ketchup and sauce brands. Whether those discussions remain live alongside the McCormick process is unclear.
Unilever, whose food division also includes Knorr stock cubes and Marmite, has been under pressure from investors to simplify its portfolio and sharpen its focus on higher-growth personal care and home care categories. The company's chief executive, Hein Schumacher, has accelerated a strategic review since taking the role in 2023.
McCormick, which trades on the New York Stock Exchange with a market capitalisation of roughly $18bn, would face a significant financing challenge to absorb Unilever's food arm, which analysts have previously valued at upwards of $15bn to $20bn. The structure of any transaction, whether a full acquisition, a merger of equals, or a spin-off and combination, has not been confirmed.
Unilever shares fell following the reports, with Reuters citing investor concern about the financial terms and execution risk of a food business separation. The reaction underscores scepticism about whether Unilever can extract full value from a demerger in the current market environment.
