March 20 (Reuters) – Spice maker McCormick has built a reputation as a savvy acquirer in the past decade, turning brands like Frank’s RedHot and French’s mustard into growth drivers that now account for a sizeable chunk of its $6.8 billion in annual sales, analysts say.
McCormick’s next trick would be its most ambitious yet.
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That includes Hellmann’s mayonnaise and Knorr bouillon – multi-billion-dollar brands that would significantly expand McCormick’s global presence in condiments and cooking aids.
Cholula hot sauce followed in 2020 in an $800 million acquisition from private equity firm L Catterton. The company holds leading brands in spices, seasoning, hot sauce and mustard.
EXECUTION IS KEY
McCormick, whose $14.5 billion market capitalisation is far smaller than Unilever’s foods business, will first have to finance the deal. The two companies gave no clues on how any deal might be structured, confirming ongoing talks but providing no financial details.
But acquiring brands to grow its own portfolio is a tried and tested strategy, and a deal to combine with Unilever’s food business, which also includes historic British brands such as Colman’s and Marmite, would make strategic sense, analysts say.
From Frank’s to Cholula, McCormick’s decade of deals sets stage for bold Unilever move
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