Unilever Food Division Spin-off and Merger with US Condiment Company

On March 31, Unilever PLC (UL) and its subsidiaries entered into a demerger and distribution agreement under which Unilever’s Foods division will be transferred to Sandman Corporation, with the majority of its shares distributed to Unilever shareholders as an interim dividend, followed by a phased merger with McCormick & Company, Incorporated (MKC).

The agreement sets out in detail the legal, operational and tax framework governing the transaction, including the allocation of assets and liabilities related to the Foods division, termination of intercompany contracts, assignment of intellectual property and real estate, provision of transitional services, dispute-resolution procedures and the structure required to meet specific U.S. tax requirements.

According to filings and press releases on the same day, the two companies have valued Unilever’s Foods business at approximately $44.8 billion and will combine it through a consideration package consisting of $15.7 billion in cash and about $29.1 billion in McCormick shares. Upon closing, Unilever and its shareholders are expected to hold approximately 65% of the merged company’s equity.

Structured as a Reverse Morris Trust to minimize U.S. federal income-tax liabilities, the transaction remains subject to regulatory and shareholder approvals, with completion targeted for mid-2027.

McCormick, headquartered in Maryland, is a global manufacturer of spices, seasonings and sauces, marketing its flavoring products to more than 150 countries through retail, foodservice and industrial channels.

Against a backdrop of consumer-goods giants reshaping their portfolios—divesting low-growth businesses and expanding higher-margin flavors and food segments such as sauces, seasonings and recipe mixes—this deal is being hailed as a landmark transaction symbolizing a broader realignment in the global food industry.