McCormick Is Shifting From the Spice Rack to the Refrigerator With This $45 Billion Deal

Yahoo Finance ·

The spice aisle will no longer determine McCormick 's ( MKC +0.85% ) fate. In March, the 137-year-old company announced an agreement to merge with Unilever 's ( UL +1.88% ) food division, a business 1.5 times its size, in a $45 billion transaction. The deal adds established brands like Hellmann's mayonnaise and Knorr bouillon to McCormick's portfolio, alongside household favorites like French's mustard and Frank's RedHot sauce. The addition of Unilever Foods is an attempt to address the structural weakness that has weighed on the stock over the past few years. The complex nature of the transaction has done little to win over investors. The stock has been under pressure from the growth of private-label brands. In its core spice and seasoning category, store brands now command nearly 40% of unit volume, one of the highest penetrations in any grocery aisle.

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