Unilever to spin off foods unit in US$44.8B tie-up with McCormick

Unilever is carving out its global foods business in a US$44.8 billion deal with spice giant McCormick, in a move that creates a new flavour-focused company while turning Unilever into a far more single‑minded beauty and home care player.

The combined foods business will bring together household names such as McCormick, Knorr, Hellmann’s, Maille, Cholula and Frank’s under one roof, spanning herbs, spices, seasonings, sauces, condiments and cooking aids across both retail and foodservice channels.

Both companies are positioning the tie‑up as the creation of a “global flavour powerhouse” with an enlarged global footprint, broader product range and deeper R&D capability around flavour, meal solutions and at‑home cooking.

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For Unilever, the separation is fundamentally about focus. Once the transaction is completed, it will become a pure‑play home and personal care company operating across beauty, wellbeing, personal care and home care.

That sharper remit will see more attention and resources channelled behind a tighter set of brands in categories where Unilever already holds strong positions, particularly beauty and wellbeing, as well as personal and home care.

According to a statement, the group has been pushing hard into premiumisation and science‑backed propositions, and has signalled that it intends to double down on digital commerce and performance across its remaining portfolio.

A key part of that strategy is “Desire at scale”, Unilever’s unified demand creation framework built around what it calls its ‘SASSY’ brands – strong, distinctive, talkable brands designed to travel across markets and channels.

Under this model, Unilever is integrating its marketing, media and innovation processes so that winning ideas can be replicated faster from market to market. The company is leaning on shared R&D platforms in areas such as formulation, microbiome, fragrances and packaging, and increasing its use of digital and AI tools to mine insights, design products and optimise creative.

On the foods side, McCormick will keep its name and global headquarters in Hunt Valley, Maryland, while establishing an international headquarters in the Netherlands, where Unilever’s foods business has long housed key R&D operations.

Management from both sides will occupy senior roles in the combined company, and Unilever will appoint four members to the 12‑strong board, underscoring its continued strategic interest even as it pivots operationally toward home and personal care.

With brands such as Knorr and Hellmann’s sitting alongside McCormick’s core herbs and spices portfolio, the enlarged business is expected to behave as a bigger, more consistent global advertiser in the flavour and meal solutions space, opening the door to broader cross‑brand platforms around flavour, cooking and food culture, and deeper collaboration in shopper marketing, retail media and foodservice communications.

The deal is targeted to close by mid‑2027, subject to shareholder and regulatory approvals as well as Works Council consultation. Until then, Unilever will continue to run its foods brands while preparing them for transition, and both sides plan a two‑year transitional services agreement after closing covering areas such as IT, sales and logistics to minimise disruption.

Unilever has said it does not expect revenue loss from separating the foods business. In the year to 31 December 2025, the unit generated about €10.7 billion in revenue with leading positions in dressings, bouillons and meal solutions. After the spin‑off, Unilever’s revenue mix will skew more heavily towards beauty, wellbeing and personal care, with an even stronger tilt towards fast‑growing markets such as the US, India and other emerging economies.

"By combining Unilever Foods’ iconic leading brands and global reach with McCormick’s exceptional portfolio, category expertise and capabilities, we are establishing a focused, high-quality business with significant top line growth and value creation potential," said Fernando Fernandez, CEO of Unilever.

He added, "This is a combination built on strong strategic and cultural alignment, providing exciting opportunities for our people and ensuring our foods brands continue to thrive as part of a global flavour leader. Our retained ownership stake reflects our conviction in the strength of the combined company and its future prospects.”

In tandem, Brendan Foley, CEO of McCormick, said the deal “accelerates McCormick’s strategy and reinforces our continued focus on flavour”.

“The Unilever Foods business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision,” he added. “Together, we will be better positioned to accelerate growth in attractive categories. This combination will create a diversified flavour leader with a robust growth profile that remains differentiated by its focus on flavouring calories while others compete for them.”

The transaction also comes as Unilever Foods steps up its digital and influencer activity. Earlier this month, Unilever appointed social-first agency SAMY to lead its global influencer strategy for the foods division, covering brands including Hellmann’s and Knorr.

The remit spans 13 markets and forms part of Unilever’s push toward a “many-to-many” brand-building model, as it leans further into creator-led marketing across digital platforms. The strategy will centre on a social-first approach, using creators, AI and real-time cultural signals to drive reach and engagement, alongside continued investment in brand marketing.

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