Unilever has agreed “commitments” with its European workers ahead of the planned sale of most of its food business to US spices maker McCormick & Co.
Confirmed in March, the London-headquartered FMCG major expects to close the transaction by the middle of next year, a deal that values Unilever’s food assets at around $44.8bn.
India, Nepal and Portugal are not included, nor are its nutrition business, the Buavita unit and its Lipton ready-to-drink operations.
Unilever told Just Food via a spokesperson: “We continue to engage constructively with our European and national works councils. We have made good progress over the past few weeks and have agreed commitments in Europe regarding the protection of employees’ terms and conditions and consultation timelines.
“The consultations will continue throughout the summer as we work through the remaining topics.”
Asked by Just Food today (30 July) to clarify the number of food production facilities that are part of the transaction with New York-listed McCormick, and whether any are located outside of Europe, the spokesperson said: “We haven’t disclosed figures on plants.”
According to Reuters, the worker commitments in the UK and Europe are for two years post the 2027 completion of the transaction.
The news agency cited a memo from Unilever’s works council in Europe sent to the employees that acknowledged the commitments made.
"We have obtained commitments regarding the long-term protection of existing terms and conditions for affected employees," the council said.
Outside of Europe, a representative for the IUF trade union suggested similar work guarantees have not been made to Unilever employees.
"We would hope that the two-year guarantee is provided globally as to not send a message that workers outside of Europe are worth less than their European counterparts," Sarah Meyer, the assistant general secretary of the IUF, told Reuters.
In terms of the transaction set-up, 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.
Once the deal is concluded, Unilever shareholders are also expected to own 55.1% of the enlarged group, McCormick shareholders 35% and Unilever 9.9%.
The Hellmann’s mayonnaise and Knorr brand owner will receive $15.7bn in cash, subject to certain closing adjustments.
McCormick’s CEO Brendan Foley and CFO Marcos Gabriel will lead the combined company, along with “senior management representation” from Unilever’s food business.
The US spices and hot sauces maker will retain its existing name, its HQ in Maryland and its listing in New York. McCormick also plans to establish an international headquarters in the Netherlands and has confirmed it will seek a secondary listing in London.
