London, UK — March 20, 2026-Unilever is in talks to sell its food business to US-based McCormick & Company, in a move that could mark a significant shift for the British consumer goods group as it focuses on higher-growth beauty, household, and personal care segments.
The company said it had received an inbound offer from McCormick concerning its food business. Both companies confirmed that discussions are ongoing, with no certainty that a deal will be agreed. Financial details have not been disclosed.
The discussions come as part of Unilever’s broader strategy under CEO Fernando Fernandez to shift toward faster-growing non-food categories, following the spin-off of its ice cream business last year.
Shares in McCormick, owner of Cholula hot sauce, fell as much as 2.6% in early trade to their lowest level since June 2018. Unilever shares rose 1% on the day after losing more than 6% over the previous two sessions amid speculation around the future of its food assets.
“We think it is sensible that Unilever are looking at options for their food business,” said Richard Saldanha, global equity portfolio manager at Aviva, a Unilever investor. “It’s clear the company wants to focus on areas such as personal care and beauty where underlying category and volume growth are more attractive.”
Unilever’s food business accounted for about a quarter of its total sales in 2025, generating more than 12.9 billion euros ($14.91 billion). However, the division has been growing more slowly than the broader business and faces headwinds from a move away from processed foods.
“The benefits of scale across (product) categories no longer outweigh the drawbacks of complexity,” Bernstein analysts said in a note.
Analysts at Barclays estimate the enterprise value of Unilever’s food division at between 28 billion euros ($32.38 billion) and 31 billion euros. McCormick, with a market capitalisation of about $14.5 billion, is significantly smaller than the potential value of the business, while Unilever’s overall market cap stands at about $136 billion.
“This potential deal seems complex, McCormick is much smaller than Unilever Food – Unilever Food generates around 3x the profit of McCormick – so unclear what value can be created as a combined entity, and what structure can be proposed that offers value to shareholders,” said Tineke Frikkee, a portfolio manager at W1M.
Unilever has been working to streamline its food portfolio, identifying non-core European food brands worth $1 billion to $1.5 billion for potential divestment.
Provided Unilever gets a good price, selling the food division makes sense, said Jack Martin, investment director at Oberon Investments. “It is a big chunk of the value of the business, so it is very important for Fernandez and his team to get this right.”
McCormick’s offer was unsolicited, according to a person familiar with the situation. Previous deals by the company include the $800 million acquisition of Cholula in 2020 and a $4.2 billion purchase of Reckitt’s North American food business in 2017.
Some analysts and bankers suggest that a deal could be structured as a “Reverse Morris Trust transaction”, allowing Unilever to spin off its food division and merge it with McCormick, with Unilever shareholders retaining the majority of the combined entity.
Market Research Outlook Analysis
The development reflects a broader shift in the Food & Beverage sector, where companies are reassessing large, diversified portfolios amid changing consumer food habits and a gradual move away from processed categories. At the same time, pricing pressures and input cost volatility are pushing firms to focus on higher-margin segments, reinforcing the importance of sharper brand portfolio strategies within FMCG.
