$60 billion food giant on the horizon! Rumors suggest that McCormick & Company(MKC.US) and Unilever(UL.US) food divisions are close to reaching a merger agreement.

Zhitong Finance APP learned that, according to people with knowledge of the matter, seasoning producer McCormick & Co. (MKC.US) is nearing a merger agreement with Unilever (UL.US) for its food business, jointly building a new industry giant valued at $60 billion. The deal is expected to be officially announced before the U.S. stock market opens on Tuesday.

McCormick is known for its seasonings and sauces, and its portfolio includes brands such as Cholula hot sauce and French’s mustard. Unilever’s food brands include Knorr and Hellmann’s.

The report said that Unilever’s board of directors held a meeting on Monday afternoon local time to review the specific terms of the pending deal. The transaction involves cash and stock. In terms of timing, it may be intended to align with the release of McCormick’s latest quarterly earnings report, but people with knowledge of the matter also cautioned that there are still uncertainties in the plan.

This major strategic adjustment by Unilever continues a general trend among consumer goods giants to streamline global business units. After the transaction is completed, the company headquartered in the UK will mainly focus on the beauty, personal care, and home care segments.

If the deal is ultimately reached, Unilever shareholders are expected to hold about two-thirds of the equity in the newly established food company. It is understood that the transaction includes about $16 billion in cash consideration to meet the needs of all participating parties. The deal is planned to adopt a reverse Morris trust structure to maximize tax benefits.

Driven by this news, McCormick’s stock price rose by nearly 4% at one point after the close of trading on Monday, while Unilever rose by nearly 1%. Before this, the two companies’ stock prices had fallen by 20% and 8%, respectively, year to date.

As this potential merger transaction takes shape, the packaged food industry is facing multiple headwinds, and industry valuations continue to decline. Investors are concerned that persistent high inflation is squeezing companies’ profit margins, while the widespread adoption of GLP-1 class drugs is also hitting food sales.

In a latest research note released on Monday, Deutsche Bank analyst Steve Powers warned: “We believe that the increasingly intense industry pressures and emerging challenges have been building for a long time and are gradually undermining the traditional assumptions supporting the investment logic for U.S. packaged consumer goods.”

“Some of the influencing factors may ultimately be only short-term, temporary, or have relatively strong cyclical characteristics, such as macroeconomic and geopolitical factors. But in our view, issues such as inflection points in demographics and deep structural shifts in industry chain bargaining power are more likely to create structural and long-lasting impacts.”

Large food companies are no strangers to M&A deals. They have both pursued large-scale expansion and carried out business streamlining. For example, over the past decade, McCormick has consistently pushed a flavor-driven acquisition strategy, gradually shifting from traditional seasoning businesses to the high-growth, high-margin area of seasoning sauces and professional seasoning solutions.

The most transformative deal came in 2017, when the company acquired Reckitt’s food division for $4.2 billion, bringing brands such as French’s mustard sauces and Frank’s RedHot hot sauce under its umbrella. At the end of 2020, McCormick also acquired the Cholula hot sauce brand for $800 million, further strengthening its leading position in the hot sauce category with strong growth.

Mars completed its acquisition of Kellanova in December 2025 for about $35.9 billion. It integrated snack brands such as Pringles, Cheez-It, Pop-Tarts, and other snack brands with Mars’s candy brands including M&M’s and Snickers, creating a global snack giant.

In addition, Campbell Soup Company (CPB.US) acquired the parent company of the premium pasta sauce brand Rao’s, Sovos Brands, for about $2.7 billion in March 2024.

Hormel Foods (HRL.US), known for Applegate organic deli meats, Spam lunch meat, and its own-brand bacon, acquired the Planters nuts brand for $3.35 billion in 2021 from the troubled Kraft Heinz (KHC.US).

Meanwhile, investors are taking an increasingly stringent view of large food groups, believing their cost structure is bloated and they are slow to respond to consumer trends. For instance, the hedge fund Elliott Management has launched a rights-protection action against PepsiCo (PEP.US) over frequent mergers and acquisitions.

General Mills (GIS.US), in June 2025, sold its U.S. yogurt business to the Lactalis Group for $2.1 billion, focusing on core cereal foods and the Blue Buffalo pet food business.