{"id":50087,"date":"2026-05-27T15:03:09","date_gmt":"2026-05-27T15:03:09","guid":{"rendered":"https:\/\/www.europesays.com\/britain\/50087\/"},"modified":"2026-05-27T15:03:09","modified_gmt":"2026-05-27T15:03:09","slug":"unilever-mccormick-deal-under-pressure-as-40bn-foods-merger-faces-backlash","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/britain\/50087\/","title":{"rendered":"Unilever McCormick deal under pressure as $40bn Foods merger faces backlash"},"content":{"rendered":"

Will Unilever McCormick merger go ahead?Unilever plans $40bn Foods merger with McCormick amid investor scepticismShare price fell sharply and remains below pre-rumour highsHigh profile investor Terry Smith exited, criticising activist-driven strategyAnalysts say Foods margins strong, questioning valuation uplift rationaleDeal likely pending approvals, shaping global food industry consolidation<\/p>\n

It\u2019s two months since Unilever announced plans to merge its Foods business<\/a> (excluding India) with American multinational McCormick & Company, in a deal worth over $40bn (\u20ac34bn). But the company is yet to convince stakeholders it\u2019s the right decision.<\/p>\n

Market reaction<\/p>\n

The British multinational\u2019s share price dropped sharply<\/a> at the beginning of March, as rumours of a deal began to emerge \u2013 they fell even further<\/a> when the rumours were confirmed. <\/p>\n

Since then, confidence has remained low, with the share price sitting at just GBX 4,293.92 \u2013 well below the pre-rumour highs of GBX 5,467.00.<\/p>\n

Then there\u2019s the widely publicised exit of one of Unilever\u2019s biggest investors. Financier Terry Smith sold his entire holding in the business<\/a> – a stock worth hundreds of millions of pounds.<\/p>\n

And the famed stock-picker pulled no punches when asked why he was selling his stake, accusing the CPG of abandoning its traditional shareholders in favour of activist-driven deals.<\/p>\n

\u201cWe have sold out of Unilever because the company appears to have abandoned its promised operational focus in favour of activist-driven break-ups,\u201d Smith told media outlet City AM. <\/p>\n

He also took aim at McCormick, saying he does not rate its \u201cmanagement and returns\u201d highly.<\/p>\n

Market analysts are also struggling to see the business case for a separation.<\/p>\n

\u201cWe don\u2019t expect a significant valuation uplift from the separation, as the Foods business was not a detraction in our view,\u201d says Svetlana Menshchikova, associate equity analyst at Morningstar Europe. \u201cIt grows more slowly than the remaining home and personal care business, but carries higher operating margins and, we believe, requires less investment to remain competitive.\u201d<\/p>\n

Foods is among Unilever\u2019s strongest performers, generating an average operating margin of 22% in 2024-2025 \u2013 matching personal care (22%) and outperforming beauty and wellbeing (19%), and home care (15%).<\/p>\n

Despite this, Unilever says it remains committed to the merger with New York-listed McCormick, making the following statement:<\/p>\n

\u201cThis transaction enables a growth-led separation of Foods at an attractive valuation, creating two stronger businesses, both positioned to win in their categories. It was a unanimous decision by the Board, which firmly believes it is in the best interests of Unilever\u2019s shareholders. We value open dialogue with our shareholders and will continue our engagement to explain the benefits of the transaction.\u201d<\/p>\n

Employee reaction<\/p>\n

It\u2019s not just investors who are struggling to see the benefits of the merger.<\/p>\n

Unilever\u2019s employees are similarly sceptical about the move, with chairman of the Unilever European Works Council (UEWC), Hermann Soggeberg, releasing the following statement:<\/p>\n

\u201cOn 31 March, the UEWC was officially informed for the first time of Unilever\u2019s intention to combine its Foods business with McCormick. At that point, the strategic decision had already been taken. From the UEWC\u2019s perspective, employee representatives were not involved at an early stage. A genuine, open consultation \u2013 including the opportunity to develop and present alternatives before the decision was made \u2013 did not take place.”<\/p>\n

The European Coordinating Committee (ECC) later expressed \u201cserious concerns\u201d over renewed uncertainty for employees, following years of restructuring, which included the slashing of 7,500 jobs<\/a> in 2024.<\/p>\n

All this begs the question \u2013 will Unilever proceed with the deal?<\/p>\n

Will the Unilever McCormick deal go ahead?<\/p>\n

Unilever remains firm in its plans to go ahead with the merger but if the share price remains low and more shareholders move to exit, we may see the board reconsider.<\/p>\n

Having said that, Menshchikova says Morningstar believes the deal is \u201cproceeding with high probability\u201d. <\/p>\n

\u201cThe board voted unanimously and closure is essentially contingent on regulatory approval, where we see limited risk of the deal not being approved,\u201d she explains.<\/p>\n

In other words, completion looks likely, but is far from certain.<\/p>\n

Moreover, Menshchikova highlights the deal is not a full departure from Foods, at least for now. \u201cUnilever will retain around 65% of the combined Unilever Foods and McCormick entity, which is expected to generate $20bn (\u20ac17.1bn) in turnover.<\/p>\n

Reshaping Big Food<\/p>\n

If it does proceed, the tie-up between Unilever and McCormick would mark one of the most significant reshaping moves in Big Food, creating a $20bn powerhouse spanning multiple sectors. <\/p>\n

It would also underscore a broader industry shift towards portfolio simplification and scale-driven consolidation.<\/p>\n

If, however, the decision is reversed, it would reinforce investor appetite for diversified, cash-generative food portfolios.<\/p>\n","protected":false},"excerpt":{"rendered":"Will Unilever McCormick merger go ahead?Unilever plans $40bn Foods merger with McCormick amid investor scepticismShare price fell sharply…\n","protected":false},"author":2,"featured_media":47906,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[20694],"tags":[374,5290,24036,11217,9129,20890,3678,4831,15883,24037,15501,12213],"class_list":["post-50087","post","type-post","status-publish","format-standard","has-post-thumbnail","category-unilever","tag-british","tag-building","tag-cleansing","tag-company","tag-consumer","tag-dutch","tag-editorial","tag-home","tag-pasta-sauces","tag-personal","tag-tea","tag-unilever"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116647153120480237","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/50087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=50087"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/50087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/47906"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=50087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=50087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=50087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}