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Deal combines Unilever’s food unit with McCormick in one of the largest food industry mergers, using a Reverse Morris Trust structure for tax efficiency.
Unilever has agreed to combine its food business with spice maker McCormick in a deal worth about $65 billion. The agreement was reached on March 31, 2026, and this comes at a time when Unilever is looking to simplify its business and enhance its growth in the competitive food sector.
Under the Reverse Morris Trust merger deal, Unilever will spin off its food division — maker of brands like Knorr and Hellmann’s — before combining it with McCormick, owner of Cholula hot sauce. The merged entity will be among the world’s largest food companies. Unilever’s personal goods and beauty segments have outpaced food unit growth, prompting the move. Unilever shares fell nearly 3% and McCormick’s dropped about 9% following the announcement.
RBC analyst James Edward Jones questioned the structure, saying, “Why is Unilever disposing of a business dominated by two brands … for a minimal control premium?” Meanwhile, consumer staples analyst Chris Beckett noted, “The deal will be transformational for McCormick, but incremental for Unilever,” highlighting differing investor views.
Unilever’s food segment has recorded sales of about €12.9 billion last year, which is more than a quarter of the company’s revenue. The merger has been a part of the company’s strategy to sell other non-core food businesses, including plant-based products and snacks, due to the changing nature of consumer demand, which is moving away from packaged food products. External influences, including the role of activists, are responsible for the current leadership and strategic direction.
As the food industry merger of 2026 involving Unilever and McCormick progresses, stakeholders will be keenly observing the developments, including regulatory clearances, which will enable the new entity to become competitive in the global arena due to the changing nature of the industry. Business Honor sees Unilever and McCormick’s $65 billion merger as a major move in the global food industry, highlighting both growth opportunities and challenges in the packaged foods sector.
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