Unilever nearing deal worth £11.9bn to merge food unit with US rival McCormick

Hellmann’s maker Unilever has said it is in late-stage talks to merge its food business with a US rival in a deal worth around 15.7 billion US dollars (£11.9 billion).

The consumer goods giant told investors that it was in advanced discussions with McCormick & Company, which makes Cholula hot sauce and French’s mustard among its range of spices and seasoning brands.

A deal is likely to involve merging Unilever’s food business with McCormick for about 15.7 billion dollars (£11.9 billion) of cash upfront and equity in McCormick.

This would mean Unilever and its shareholders hold 65% of the combined company once a sale completes.

Unilever said it is possible that an agreement could be reached today, but that there was no certainty over a sale.

Any deal would mark a significant overhaul for the multinational business which owns household-name food brands including Hellmann’s, Colman’s and Marmite.

Selling the food business would leave it with a collection of major beauty, personal and home care labels such as Dove, Radox, Vaseline and Persil.

Beauty and wellbeing brands have been selling particularly well in recent months, according to its latest results.

Last year, the group spun off its ice cream business to create the Magnum Ice Cream Company, which it floated with a primary listing in Amsterdam and secondary listings in New York and the UK.

It has also sold off a number of food brands, including snacking business Graze and plant-based brand The Vegetarian Butcher, in recent years.

On the other hand, it has sought to grow its personal care business over the past year with deals to acquire the fast-growing Wild and Dr Squatch brands.