Unilever nearing deal to merge food business with spice maker McCormick

In response to media speculation, Unilever released a statement on Tuesday saying that it was in “advanced discussions” with McCormick regarding a potential deal to combine its food division with the spice maker. If an agreement is reached, Unilever would get $15.7 billion in cash.

According to Unilever, the intention is that Unilever and its shareholders will hold 65% of the combined entity’s shares after the merger.

Unilever said that the agreement might be finalized today, but stressed that it is not a done deal yet. If the deal goes through, the transaction will be structured as a Reverse Morris Trust, which should offer tax benefits to Unilever and its shareholders, the company said.

According to Reuters, Unilever’s food business is valued at around $32.1 billion. That, combined with McCormick’s value of around $14.2 billion and the $15.7 billion in cash on offer, could create a new entity worth around $60 billion.

The potential deal follows the completed spin-off of Unilever’s ice cream business last year.