MKC Shares Jump After Hours on Reports of Imminent Unilever Deal

• Under the deal, Unilever shareholders are expected to own about two-thirds of the new business, the report said.
• It noted that the deal includes a $16 billion cash component while also adding Unilever board met on Monday afternoon to review details of the transaction.

Shares of McCormick (MKC) rose 2% after hours on Monday following reports that a deal between the company and Unilever (UL) could be announced as soon as Tuesday,

The Wall Street Journal reported, citing people familiar with the matter, that Unilever is in advanced talks to merge its food business with McCormick in a deal that would make a new food company worth about $60 billion, including debt.

Under the deal, Unilever shareholders are expected to own about two-thirds of the new business, the report said. It noted that the deal includes a $16 billion cash component while also adding Unilever board met on Monday afternoon to review details of the transaction.

McCormick is set to report its latest quarterly earnings on Tuesday. Wall Street analysts expect the company to report quarterly revenue of $1.79 billion and earnings per share of $0.59, marginally below the $0.6 reported in the corresponding quarter of last fiscal year.

The report comes on the heels of an earlier report from Bloomberg this month which said that Unilever, the maker of Hellmann's mayonnaise, is in the early stages of considering a separation of its food assets as it looks for ways to further streamline its sprawling portfolio.

The Anglo-Dutch company is considering a potential separation of most or all of its food business, the report had said, as it seeks to focus on growth from its beauty, personal care, and wellbeing brands, which house products such as Dove soap and Axe deodorant.

Unilever spun off its ice cream division into Magnum Ice Cream Co (MICC). last year on the heels of selling its spreads and tea divisions. The company still owns Marmite and Knorr.

McCormick, based out of Maryland, owns brands including French’s yellow mustard, Old Bay seasoning, Frank's RedHot hot sauce, and Cholula hot sauce, among others.

How Did Retail Traders React?

On Stocktwits, retail sentiment around MKC and UL stock stayed within the ‘bullish’ territory at the time of writing, while message volume remained at ‘extremely high’ and ‘high’ levels, respectively.

UL and MKC stock have fallen 10% and 35%, respectively, over the past 12 months.

Read More: Tesla Scores Court Reassignment in Musk Cases as Judge Blasts Bias Motion

For updates and corrections, email newsroom[at]stocktwits[dot]com.