Illustration: Natalie Peeples/Axios
Unilever has agreed to sell its food business to spice and sauce maker McCormick, the companies said on Tuesday.
Why it matters: The deal creates a $66 billion condiment powerhouse under McCormick, as Big Food refocuses its portfolios.
Zoom in: McCormick, whose portfolio already includes Cholula, Frank's RedHot and French's mustard, will pick up Hellmann's mayonnaise and stock brand Knorr from Unilever.
- Unilever will focus on its beauty and personal care products, which include Dove soap, Axe body spray, and Vaseline.
- Unilever said on Tuesday the deal would be valued at around $66 billion and include nearly $16 billion in cash. Shareholders would own about 65% of the new company.
- Together, the combined foodservice platform will have approximately $6 billion in fiscal year 2025 combined company sales.
Flashback: Axios Pro reported in November that Unilever had hired a bank to consider trimming its food portfolio.
- Last year, Unilever spun off its ice cream business which includes Ben & Jerry's and Magnum.
Zoom out: The major food conglomerates are struggling to adapt to consumers' changing tastes.
- In February, Kraft Heinz paused a planned split that would have separated Heinz, Philadelphia cream cheese, and Kraft Mac & Cheese, from brands like Oscar Mayer hot dogs, Kraft Singles and Lunchables.
- Keurig Dr Pepper is currently digesting an acquisition of Peet's Coffee that'll also see the company split in two.
- PepsiCo. and J.M. Smucker could also shed assets, under pressure from activist investor Elliott.
The intrigue: Unilever reportedly held talks to sell its food business to Kraft Heinz, but talks stalled.
