McCormick & Co. has agreed to acquire the food business of UK-based Reckitt Benckiser for $4.2 billion, beating out rival bids from companies like Unilever and Hormel Foods. Included brands are French's Mustard and Frank's Red Hot.

Why it matters: This deal would make McCormick the world's third-largest condiment purveyor (behind Unilever and Kraft Heinz), up from 10th place currently. And it's paying through the nose to get there, as recent reports had the Reckitt business selling for closer to $2.4 billion. For more context, the $4.2 billion price-tag represents more than 7x annual sales and 20x EBITDA, compared to Bernstein market averages of 3.3x sales and 16.2x EBITDA (per Reuters).

M&A context: McCormick last year pulled a $2.1 billion offer to buy Premier Foods, so this is a bit of a rebound. Reckitt had put the business on the block, in part, to reduce a massive debt-load created by its recent $16.6 billion agreement to purchase Mead Johnson.

Bottom line: "While large food manufacturers struggle as consumers shun packaged foods in favor of fresher, more nutritious items, this deal allows McCormick to capitalize on the public's desire to eat better without losing the flavor and taste they covet." – Christopher Doering, FoodDive

Go deeper

Updated 5 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 5:30 p.m. ET: 33,484,120 — Total deaths: 1,004,082 — Total recoveries: 23,212,633Map.
  2. U.S.: Total confirmed cases as of 5:30 p.m. ET: 7,180,179 — Total deaths: 205,729 — Total recoveries: 2,794,608 — Total tests: 102,342,416Map.
  3. Health: Americans won't take Trump's word on the vaccine, Axios-Ipsos poll finds.
  4. States: NYC's coronavirus positivity rate spikes to highest since June.
  5. Sports: Tennessee Titans close facility amid NFL's first coronavirus outbreak.
  6. World: U.K. beats previous record for new coronavirus cases.
  7. Work: United States of burnout — Asian American unemployment spikes amid pandemic

What to watch in tonight's debate

Joe Biden (left) and President Trump (right) are facing off in Cleveland for the first presidential debate. Photos: Alex Wong (of Biden) and David Hume Kennerly (of Trump)/Getty Images

President Trump will try to break Joe Biden's composure by going after his son Hunter and other family members in tonight's first presidential debate — a campaign source tells Axios "nothing will be off the table" — while Biden plans to stick to the economy, coronavirus and new revelations about how Trump avoided paying taxes.

Driving the news: Biden and Trump are set to debate at 9 p.m. ET at Case Western Reserve University in Cleveland, and it will be moderated by Fox News' Chris Wallace.

Massive layoffs hit Disney theme parks

A person posing for a photo in front of the iconic Disney castle at Disneyland Resort in Hong Kong on Sept, 25. Photo: Miguel Candela Poblacion/Anadolu Agency via Getty Images

Disney is laying off 28,000 workers at its theme parks and experiences and consumer products divisions, the company said in a statement Tuesday.

Why it matters: The coronavirus pandemic has forced the company to close its California theme parks and limit attendance at re-opened parks elsewhere around the U.S. Around 67% of the 28,000 laid off workers are part-time employees, according to Josh D’Amaro, chairman of Disney's parks, experiences and products division.