US-headquartered Toms Capital Investment Management has reportedly built a stake in McCormick, the US-based spices and seasonings business.
According to unnamed sources for Reuters, the size of the investor’s interest is ‘significant’, the news agency said on Friday.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The sources familiar with the issue were not permitted to discuss any details but said Toms, which also has an office in London, made the investment at an unspecified point in the second quarter.
Approached by Just Food, Toms and McCormick had not responded to a request for to comment at the time of publication.
On 20 March, Unilever confirmed it was in discussions with McCormick to sell most of its food assets, what the FMCG giant described at the time as a “potential strategic transaction”.
By the end of that month, the talks had moved to an “advanced” stage and before the day concluded on 31 March, a deal was revealed.
It combines brands such as McCormick’s namesake line of herbs and seasonings, French’s mustard and Frank’s RedHot sauce with Unilever’s Hellmann’s mayonnaise, Knorr cooking aids and Colman’s mustard.
The transaction valued Unilever’s food business at around $44.8bn. However, it excludes the CPG major’s food assets in India, Nepal and Portugal. It also does not take in the group’s lifestyle nutrition business, the company’s Buavita unit and its Lipton ready-to-drink operations.
The deal is expected to be completed by mid-2027 subject to the approval of McCormick’s shareholders and regulators.
McCormick’s share price saw a muted reaction to the Toms’ speculation on Friday, closing the New York trading day up 1.15% at $47.37.
Meanwhile, McCormick’s shares generally remain shaded in the red, down 5.71% over the past month and 29.6% so far this year.
It is a similar scenario for Unilever, which exited its ice-cream business last year through a spin-off but retained a 19.9% interest in what is now The Magnum Ice Cream Company. That stake is expected to gradually be wound down over five years.
Unilever’s shares were under pressure today (1 June), falling 13.8% to 4,157 pence as of 1:05pm BST in London. They have fallen 5.7% in the past month and 13.8% so far this year.
Under the terms of the transaction, Unilever and its investors will receive a mix of McCormick’s existing voting and non-voting common stock, equating to 65% of the combined business.
When the deal is closed, Unilever shareholders are expected to own 55.1% of the enlarged group, McCormick shareholders 35% and Unilever 9.9%.
The FMCG major will also receive $15.7bn in cash, subject to certain closing adjustments.
