Unilever in talks to sell foods unit to McCormick in mega deal

British consumer goods major Unilever said on Friday it has received an inbound offer for its foods business and is in discussions with McCormick & Company, although it cautioned that there is no certainty a deal will be finalised.

McCormick separately confirmed it is engaged in talks with the London-based group, following a report by The Wall Street Journal a day earlier.

Foods unit seen as attractive but non-core

"The Board believes Foods is a highly attractive business, with a strong financial profile led by market-leading brands in growing categories and is confident in the future of the Foods business as part of Unilever," Unilever said in a statement on Friday.

The unit, which includes widely recognised brands such as Knorr, generated more than €12.9 billion in revenue in 2025, accounting for roughly a quarter of the company’s total sales.

Market estimates suggest the division could be valued in the tens of billions of dollars.

People familiar with the matter told the Wall Street Journal that a potential all-stock deal could be reached within weeks, provided negotiations do not break down.

Strategic pivot toward higher-growth segments

A sale would mark a significant strategic pivot for Unilever, further streamlining its portfolio and sharpening its focus on faster-growing categories such as beauty, personal care and home products.

Chief executive Fernando Fernandez has previously indicated that the company is prioritising targeted, smaller acquisitions in these areas rather than pursuing large transformational deals.

The potential divestment would also follow a series of portfolio reshaping moves by Unilever in recent years.

The company had explored acquiring GlaxoSmithKline’s consumer health unit in 2021 but ultimately abandoned the bid.

More recently, it spun off its ice cream business, now operating as Magnum Ice Cream, which includes brands such as Ben & Jerry's and Breyers.

Industry pressures drive consolidation

The discussions come at a time when food companies are grappling with softer demand, as consumers tighten spending and increasingly shift toward lower-cost private labels.

The growing adoption of weight-loss drugs has also begun to weigh on overall consumption trends.

McCormick itself has flagged challenges ahead, forecasting weaker profits in 2026 due to rising tariff-related costs.

The company currently has a market value of around $14.5 billion, compared with Unilever’s valuation of more than $130 billion, according to market data.

The potential deal also aligns with a broader trend of corporate restructuring across industries, as companies look to simplify operations and unlock shareholder value.

In the food sector, Kraft Heinz had previously announced plans to split its business, although it later paused the move.

Similar break-up strategies have also been seen in industrial and media sectors, with companies such as General Electric and Warner Bros. Discovery pursuing structural changes to refocus on core operations.

For Unilever, a potential exit from foods would mark another step in its transformation into a more focused consumer goods company centred on higher-margin, faster-growing segments.