Unilever has confirmed that its discussions with McCormick about a possible transaction for its food arm are at an advanced stage and could be concluded this Tuesday (31).
The combination of Unilever Foods and McCormick would involve an initial payment of approximately US$15.7 billion and the majority of it in McCormick shares, with Unilever owning 65% of the combined company. However, Unilever considers that there is no certainty that the negotiations will result in a transaction
The transaction excludes a part of Unilever’s food portfolio, such as the company’s Indian arm. The potential combination would be accomplished through a Reverse Morris Trust, which is intended to be exempt from US federal income taxes for Unilever and its shareholders, but full terms will only be announced if a transaction is agreed.
The announcement was made after the Wall Street Journal report on Monday the 30th that the companies were close to a deal that would create a US$60 billion food giant.
