The UK's Competition and Markets Authority has launched a Phase 1 investigation into McCormick & Co.'s $44.8bn acquisition of Unilever's food assets, assessing the deal's potential impact on competition in the UK. The transaction, announced in March, would see the US-headquartered seasonings and spices business take over most of the FMCG giant's food assets, including the Knorr soups and Hellmann's mayonnaise brands, but not Lipton drinks nor Unilever's operations in India, Nepal and Portugal. The CMA said it invited comments on 21 July, with interested parties given until 5 August to respond, and has set a deadline of 11 November to complete the Phase 1 probe, when it will decide whether to follow up with a more in-depth Phase 2 assessment. Last month, Unilever and McCormick decided to seek a buyer for Unilever's Colman's mustard brand, a move Unilever said was made to proactively address potential competition concerns; Colman's joins Unilever's lifestyle nutrition business, the Buavita unit, the Lipton brand and the India, Nepal and Portugal assets that are not included in the deal. Under the terms of the transaction, Unilever and its investors are to receive a mix of McCormick's existing voting and non-voting common stock equating to 65% of the combined business, with Unilever shareholders expected to own 55.1% of the enlarged group, McCormick shareholders 35% and Unilever 9.9%, alongside $15.7bn in cash subject to certain closing adjustments. The combined company, which will include McCormick brands such as Schwartz spices, French's mustard and Cholula hot sauces, will be led by McCormick CEO Brendan Foley and CFO Marcos Gabriel, with senior management representation from Unilever's food business.
McCormick & Company IncorporatedUK CMA opens Phase 1 probe into McCormick's $44.8bn acquisition of Unilever food assets, creating regulatory uncertainty for the deal.
Unilever PLCCMA Phase 1 investigation into the sale of Unilever's food assets to McCormick could delay or block the $44.8bn transaction.
