Unilever considers carving out its food business; India won't be part of McCormick deal

Mumbai: Unilever will exclude its India business from a $44.8 billion transaction to combine its global foods unit with McCormick & Company, highlighting the market’s strategic importance even as the maker of Lux and Dove exits slower-growth food categories globally.

The deal, announced Tuesday, will create a $20 billion revenue powerhouse combining brands such as Knorr and Hellmann’s with McCormick’s portfolio including French’s, Cholula and Frank’s RedHot. India, Nepal and Portugal along with some other businesses are carved out of the transaction.

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Unilever said the the move marks a pivot toward becoming a pure-play home and personal care company, with about €39 billion in revenue, focusing on higher-growth segments such as beauty, wellbeing and household products.

"We are unlocking trapped value through a growth-led separation of Foods, creating a scaled, global flavour powerhouse. 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, " Unilever chief executive officer Fernando Fernández said.

Following separation, and based on FY25 revenues, Unilever said it is expected to have a superior footprint in faster-growing markets, with anchor markets of the United States and India contributing 38% of Group turnover versus 33% in FY25 and emerging markets contributing 62% of group turnover compared to 59% in FY25.

In India, HUL’s foods business generates more than Rs15,000 crore in annual revenue, accounting for about 22% of overall sales, with market leadership across tea, ketchup, and malted food drinks.

Both HUL and Unilever last year spun off their ice cream businesses, a step aimed at giving the underperforming segment greater operational flexibility to sharpen focus, respond faster to local markets and compete more effectively in high-growth regions such as India.

The parent’s packaged foods division contributes more than a quarter of group sales. However, it is currently facing structural headwinds amid a shift away from ultra-processed products, rising competition from private labels, and softer demand as weight-loss drugs start to influence consumption patterns.

Under the terms, Unilever and its shareholders will receive a 65% stake in the combined company, valued at about $29.1 billion, along with $15.7 billion in cash. Unilever shareholders will ultimately own 55.1% of the merged entity, while McCormick investors will hold 35%. Unilever will retain a 9.9% direct stake, which it plans to sell down over time.