Unilever is exploring a strategic carve-out of its global foods division as it enters advanced discussions with McCormick & Company to combine significant parts of the business, in a move aimed at reshaping its portfolio and sharpening focus on high-growth segments.
According to company disclosures, the proposed transaction will exclude Unilever’s India foods operations, ensuring that Hindustan Unilever (HUL) continues to independently manage one of its most critical verticals. The India foods portfolio—comprising categories such as tea, ketchup, and malted food drinks—remains a core contributor, generating over ₹15,000 crore annually and accounting for roughly 22% of HUL’s total revenues.
The potential deal, which could involve a cash component of around $15.7 billion, is expected to be largely structured through McCormick stock. This would likely result in Unilever and its shareholders holding a majority stake of about 65% in the combined entity. The transaction is also anticipated to be executed via a Reverse Morris Trust, enabling tax efficiency under US regulations.
While talks are at an advanced stage and an agreement could be reached soon, Unilever has clarified that no final decision has been made, and discussions remain ongoing.
Importantly, HUL has reiterated that it is not engaged in any discussions to divest its foods portfolio, underscoring that the segment continues to be a “core and attractive” part of its long-term strategy. The India business has consistently delivered market leadership across key categories and remains central to Unilever’s growth ambitions in emerging markets.
Globally, however, Unilever’s foods division—home to brands such as Knorr and Horlicks—has been facing structural challenges. These include shifting consumer preferences away from ultra-processed foods, intensifying competition from private labels, and evolving consumption trends influenced by health and wellness movements, including the rising impact of weight-loss drugs.
The carve-out and potential merger with McCormick signal a broader transformation underway at Unilever, as it seeks to streamline operations and focus on higher-margin segments like beauty, personal care, and home care. The company had previously spun off its ice cream business to unlock value and improve agility in competitive markets.
If completed, the deal would create a powerful global foods entity, combining Unilever’s scale in packaged foods with McCormick’s dominance in spices and seasonings—while leaving India, one of Unilever’s most strategic markets, firmly outside the transaction.