- Amid rumors, the companies confirmed the deal to WSJ early Friday.
- Unilever’s food business is said to be worth tens of billions of dollars, and the deal with McCormick would involve only stock and no cash - WSJ source.
- Stocktwits sentiment for UL and MKC ‘bullish.’
U.S.-listed shares of Unilever PLC jumped 2.3% in early premarket trading on Friday, amid news of a restructuring involving its food business.
The packaged goods giant plans to separate its foods business, which includes Knorr soups, Hellmann’s mayonnaise and Lipton tea, among other items, and combine it with spice maker McCormick, the companies confirmed to the Wall Street Journal.
McCormick shares rose 1% in Friday’s premarket session.
Unilever Sharpen Focus On Beauty, Personal Care
The major strategy shift by Unilever would continue a trend of consumer conglomerates streamlining their businesses and would leave U.K.-based Unilever focused on beauty, personal-care products and home, the Journal reported.
Unilever’s food business is said to be worth tens of billions of dollars, and the deal with McCormick would involve only stock and no cash, the Journal reported, citing information from a source.
Maryland-based McCormick, known for its bottled spices and brands like French’s yellow mustard, is set to report its first-quarter results on March 31.
On Stocktwits, retail sentiment for UL and MKC was ‘bullish’ early Friday.
Consumer Conglomerates Eye Deals
Trian Fund Management’s Nelson Peltz joined Unilever’s board in 2022 after the hedge fund took a big stake in the company. The activist investor was previously a director at Unilever rival Procter & Gamble, and has a record of pushing for splits and reconfigurations of sprawling conglomerates.
Unilever spun off its ice cream business, Magnum Ice Cream, last year. In 2021, the company made unsolicited approaches to GlaxoSmithKline’s consumer-health unit but backed off the idea the following year.
Kraft Heinz last year unveiled plans to split into separate companies, reflecting a broader “conglomerate breakup” trend gaining traction across the consumer sector.
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