Iwan Thomas comments in The Grocer on the potential sale of Unilever's food division

Unilever has recently announced that it is in talks to sell its food division to McCormick, a US flavour and condiment business.

This is the latest development in a series of FMCG divestments, mergers, and sales which demonstrate how the model of owning everything from mayonnaise to moisturiser may no longer command the confidence of management or markets. 

New York Stock Exchange-listed McCormick is a major player in flavours, herbs, spices, sauces, and seasonings. The mooted merger would see it incorporate Unilever's range of brands, while Unilever would focus its product range on household and personal care.

If there were any remaining doubt about Unilever's direction of travel, this potential transaction should put it firmly to rest. A Foods division generating over €12.9 billion in revenue does not go up for sale unless they have made a clear strategic choice about its future, although it remains to be seen exactly how the acquisition will be structured, should it go ahead. 

For McCormick, with a market capitalisation of around $14.5 billion, this deal would be extraordinarily ambitious.  If this deal were to complete it would be the ultimate confirmation of that strategy and a clear and unambiguous signal that Unilever is ultimately committed to repositioning itself around beauty, personal care, and wellbeing. 

Iwan Thomas, Associate in our Corporate team, comments in The Grocer:

[The planned selloff] is perhaps the clearest signal yet that the era of the FMCG conglomerate is drawing to a close.

Read the full article in The Grocer here (subscription required).