Two Popular Food Giants Just Announced A Megamerger

In what could become one of the largest mergers of the decade, McCormick, a global condiment and spice manufacturer, is buying most of the Unilever Foods division in a deal valued at almost $45 billion. Unilever is the consumer goods company that owned Ben & Jerry's ice cream, and it also owns many home and personal care (HPC) brands, such as Dove. By selling its foods division, Unilever will become solely an HPC company that focuses on beauty, home care, and personal care products and brands. For the merger to happen, both companies need the approval of shareholders and industry regulators. They hope to complete the deal by mid-2027.

Investors typically don't like uncertainty in companies whose shares they own, and large mergers can create questions about how the new combined entity will operate and perform. So, when McCormick announced the merger, it almost predictably created immediate uncertainty for both companies' stock prices. McCormick (MKC) saw a decline of about 5% in its stock price on the date the merger was announced, while Unilever (ULVR) shares fell by 7%. 

As part of the deal, McCormick and the Unilever Foods division (apart from its operations in India) will combine under the McCormick name. Unilever's shareholders will receive $29.1 billion in shares, amounting to 65% of the combined-company outstanding equity. Additionally, McCormick will send $15.7 billion in cash to Unilever, creating a deal that estimates Unilever Foods' value at $44.8 billion. Just before the announced merger, McCormick had an enterprise value of about $21 billion. 

The two largest Unilever Foods brands that will move to the new company are Hellmann's and Knorr, which have recently accounted for about 70% of Unilever Foods' sales. The deal does not include Ben & Jerry's or other Unilever ice cream brands, as those were formed into a new company called Magnum Ice Cream Co. in late 2025. After the merger, the company's future annual sales are estimated at $20 billion — a significant increase from McCormick's reported sales of $6.84 billion in fiscal 2025. 

McCormick will maintain its corporate headquarters in Maryland, but it will add several offices in Europe, including one in the Netherlands. Adding corporate presence in Europe will help the company match up more closely with Unilever's current corporate presence, supporting the newly acquired parts of its business.

With a value of almost $45 billion, the McCormick-Unilever Foods deal ranks as one of the largest mergers of the past decade. Among food companies, one of the biggest recent deals involved a merger between Kraft Food Groups and Heinz Company in 2015, also with a value of $45 billion. Although the newly created Kraft Heinz stock looked like a safe investment 10 years ago, this deal did not deliver the expected benefits, and the company lost 60% of its stock value over the decade after the merger. Kraft Heinz (KHC) had announced a plan to split the two companies in September 2025, but it put those plans on hold in February 2026.

McCormick has been a strong dividend stock with a payout ratio of about 80%. The company announced an increase in its quarterly dividend from 45 cents to 48 cents in late 2025, meaning it has an annual dividend payment of $1.92. McCormick has paid a dividend every year since 1925. Stocks from companies like this are desirable for some investors, as dividend stocks can provide long-term income. As part of the merger announcement, McCormick said that it expects to continue making consistent dividend payments. However, Kraft Heinz had to cut its dividend four years after its merger from 62.5 cents to 40 cents per quarter because of reduced financial flexibility after the merger.