McCormick, the company behind brands like Stubb’s BBQ sauce and Lawry’s, is combining with the company behind Knorr and Hellman’s, Unilever Foods. The combined entity will be a global leader in seasonings and sauces, with a combined revenue of around $20 billion.

The deal is being structured in a way to avoid change in control and the accompanying capital gains tax. Under the structure Unilever and its shareholders are expected to receive shares equating to 65.0% of the fully diluted combined-company outstanding equity, equivalent to $29.1 billion. Unilever will also receive $15.7 billion in cash net of closing items.

Unilever shareholders are expected to own 55.1%, McCormick shareholders will own 35.0% and Unilever is expected to own 9.9%. The transaction carries an implied value of Unilever Foods at 13.8x EV to EBITDA.

The deal is expected to close in Mid-2027 if it receives shareholder approval and clears regulatory hurdles. The combined company is expected to have $600 million in cost synergies that will be at full run-rate by the end of year three.

This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavor. The Unilever Foods
 business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision. Together, we will be better positioned to accelerate growth in attractive categories. This combination will create a diversified flavor leader with a robust growth profile that remains differentiated by its focus on flavoring calories while others compete for them.

Unilever Foods’
 global portfolio of strong brands, combined with our proven expertise in insight-driven brand-building and integration, will enable us to deliver flavor in new and exciting ways for more consumers, driving significant growth across the combined portfolio and value for all stakeholders. Integrating two global organizations of this scale requires disciplined execution, and we are confident that our detailed integration roadmap, experienced teams from McCormick and Unilever
, external advisors and our strong partnership will enable us to capture the full value of this opportunity. McCormick is the right partner for Unilever Foods’
 brands and employees, and our shared culture and values will empower our combination. We are excited to welcome their exceptional talent and international expertise to our Power of People culture.

Brendan Foley, Chairman, President and CEO of McCormick

The executive team post-close will be comprised of the CEO and CFO from McCormick, and senior management representation from Unilever Foods. The new combined entity will still be headquartered at McCormick’s Hunt Valley, Maryland global headquarters. McCormick will also establish international headquarters in the Netherlands.

McCormick has a history of inorganic growth to expand their business. Most recently, they were in talks to acquire Sauer Brands but ultimately lost out on the transaction to private equity.

If the transaction can be successfully executed, the combined company will own quite a bit of the sauce and seasoning aisle. That will give them additional leverage when working with retailers.

Business combinations of this size are difficult to integrate though to achieve the projected synergies. Not only is it difficult to combine operations in an efficient manner, mixing corporate cultures (especially internationally) can be the hardest part of a transaction.

You can end up with two companies operating inefficiently under one roof. There are many examples of this happening with large business combination. One in this space that comes to mind and is recent is the break-up of Kraft Heinz.