Unilever in talks to separate food business and combine it with McCormick: WSJ

UNILEVER, the maker of Hellmann’s mayonnaise, is in talks to sell its food business to McCormick & Co, according to a person familiar with the matter.

A deal between the Anglo-Dutch consumer goods company and the Maryland-based spices and seasonings maker could come together by the end of the month, said the person, who asked not to be identified because the information was private.

The person said the transaction would be structured as a so-called Reverse Morris Trust, a type of merger that’s designed to be tax-free.

Bloomberg News reported earlier this week that Unilever was considering spinning off its food business.

A transaction would likely value the Unilever food brands at tens of billions of dollars, people familiar with the matter said. The Wall Street Journal reported on Thursday that Unilever was in talks with McCormick. 

The companies haven’t reached an agreement on a transaction and talks could still end without one. Representatives for Unilever and McCormick didn’t immediately respond to requests for comment on the talks.

A sale would be part of a Unilever pivot toward health and beauty products. Its brands include Dove, Vaseline and Nexxus, among many others.

Unilever has over the last decade sold off other food assets including its global spreads division, which included I Can’t Believe It’s Not Butter!, and more recently snack brand Graze and fake-meat maker The Vegetarian Butcher. 

Major food companies like Unilever and rival Nestlé SA are struggling to drive growth as cash-strapped consumers rein in spending and turn to cheaper store brands. The increasing popularity of GLP-1 weight-loss drugs is also a threat as buyers eat less overall or opt for less calorie-dense products.

SEE ALSO

Australian tea brand T2 Tea shuts all Singapore outlets as it looks to ‘reset’ Asia retail strategy

Unilever to sell Indonesia tea business to Djarum Group for 1.5 trillion rupiah

Guinness-owner Diageo taps former Tesco chief Dave Lewis for CEO role

Beauty, on the other hand, has been an important growth market for multinationals, as younger and older consumers alike spend on everything from multistep skin-care routines to fragrance collections. BLOOMBERG