Clifford Chance and Wachtell, Lipton, Rosen & Katz are advising Unilever as it agrees to combine its foods division with McCormick & Company, advised by Hogan Lovells and Cleary Gottlieb, in a deal valued at $45bn.
The proposed transaction would combine Unilever’s foods arm — which includes brands such as Knorr, Marmite and Hellmann’s — with McCormick’s portfolio, which includes Schwartz, French’s, Old Bay and Frank’s RedHot.
Unilever has turned to a cross-border team led by City-based Clifford Chance (CC) corporate partners Melissa Fogarty and Dominic Ross, alongside Wachtell partners Ben Roth and Jenna Levine in New York.
On the buyside, Cleary has assembled a transatlantic team led by New York corporate partners Glenn McGrory and Charles Allen, alongside London partner Dan Tierney. McGrory, a member of Cleary’s executive committee, co-leads the firm’s Americas M&A practice.
Hogan Lovells is also advising McCormick, with an M&A team led by London partners Tom Brassington and Caitlin Weeks, supported by antitrust partner Alice Wallace-Wright and London tax head Philip Harle.
Both Cleary and Hogan Lovells have worked with McCormick in the past, with Hogan Lovells’ Brassington and Weeks advising on its £536.7m takeover offer for Premier Foods in 2016, while Cleary’s Allen and McGrory advised on a range of transactions including its $4.2bn acquisition of Reckitt Benckiser’s food business in 2017.
Meanwhile, CC previously advised Unilever on its sale of The Vegetarian Butcher to Netherlands plant-based food brand Vivera last year.
Unilever CEO Fernando Fernandez explained the rationale behind the deal: ‘We are unlocking trapped value through a growth-led separation of Foods, creating a scaled, global flavour powerhouse,’ he said. ‘By combining Unilever Foods’ iconic leading brands and global reach with McCormick’s exceptional portfolio, category expertise and capabilities, we are establishing a focused, high-quality business with significant top line growth and value creation potential.’
McCormick CEO Brendan Foley added: ‘This transformative combination accelerates McCormick’s strategy and reinforces our continued focus on flavour. The Unilever Foods business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision.
‘Together, we will be better positioned to accelerate growth in attractive categories. This combination will create a diversified flavour leader with a robust growth profile that remains differentiated by its focus on flavouring calories while others compete for them,’ he concluded.
Under the terms of the transaction, Unilever will receive a 65% equity stake in the combined company, as well as $15.7bn in cash.
The combined company will be led by McCormick’s CEO Foley and chief financial officer Marcos Gabriel, with ‘senior management representation from Unilever Foods,’ Unilever said in a statement.
The deal marks ‘another decisive step to reshape Unilever into a simpler, shaper, higher growth company,’ according to the statement. Over the past decade, the group has steadily exited its legacy food categories through a series of high-profile disposals, placing greater emphasis on beauty, wellbeing and personal care.
Linklaters corporate team was heavily involved in these mandates. In December last year, the firm advised on a £6.9bn deal that saw Unilever’s The Magnum Ice Cream Company spun off as an independent publicly listed entity.
Prior to this, the firm advised on both the €4.5bn sale of Unilever’s tea business, including Lipton and PG Tips, to CVC Capital Partners in July 2022, and the €7bn sale of its spreads business to KKR in 2017.
