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With a net profit margin of 23.20%, McCormick & Company, Incorporated (NYSE:MKC) is included among the 10 Most Profitable Dividend Stocks to Invest In Now. UBS Revises McCormick (MKC) Outlook Following Food Sector Update

On June 2, UBS analyst Peter Grom lowered the price recommendation on McCormick & Company, Incorporated (NYSE:MKC) to $51 from $53. He reiterated a Neutral rating on the stock. In a research note, the analyst said the firm updated its expectations across the food sector to reflect current demand trends and inflation pressures.

On May 29, Reuters reported that Toms Capital Investment Management, an activist US hedge fund, had built a significant stake in McCormick, according to sources familiar with the matter. The investment comes as the food company works on a major acquisition deal.

The sources said Toms Capital, led by Benjamin Pass, invested in McCormick during the second quarter after the company announced plans to acquire Unilever's food business. The sources were not authorized to discuss the matter publicly. The size of Toms Capital's stake and the actions it may seek to pursue at McCormick could not immediately be determined.

McCormick & Company, Incorporated (NYSE:MKC) manufactures, markets, and distributes herbs, spices, seasonings, condiments, and flavors across the food and beverage industry. Its customers include retailers, food manufacturers, and foodservice businesses.

While we acknowledge the potential of MKC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

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Die Zacks-Branche für Lebensmittel und andere Produkte steht vor großen Herausforderungen. Die anhaltende Inflation und die gestiegenen Lebenskosten belasten weiterhin das Verbraucherverhalten. Trotzdem konzentrieren sich Unternehmen auf operative Effizienz, Produktinnovation und Portfolio-Optimierung, um langfristige Wachstumschancen zu schaffen. Führende Unternehmen wie Mondelez International, McCormick & Company, Post Holdings und The Chefs' Warehouse setzen auf starke Marken, strategische Investitionen und sich entwickelnde Produktangebote, um ihre Marktpositionen zu stärken.

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Es gibt eine Umstrukturierung im Konsumsektor. Marktvolatilität, Zolldruck und ein kassenarmer Verbraucher, der immer mehr über seine Ausgaben nachdenkt, haben einen einzigartigen Zeitpunkt geschaffen. Unternehmen mit dauerhaften Marken und Preisvorteilen werden auf Niveaus gehandelt, die möglicherweise nicht bestehen bleiben.

Hier sind vier Aktien, die jetzt im Mai eine ernsthafte Überlegung wert sind.

1. Coca-Cola

Wenn ein Unternehmen in fast jedem Land der Welt Umsatz und Earnings per Share (EPS) vorhersagen übertrifft und sein volles Jahr umleitet, ist das wahrnehmbar und potenziell kaufenwertig. Coca-Cola (NYSE: KO) meldete im ersten Quartal 2026 Ergebnisse am 28. April. Es veröffentlichte einen Umsatz von 12,47 Milliarden US-Dollar, was einem Zuwachs von 11,2 % gegenüber dem Vorjahr entspricht, und ein vergleichbares EPS von 0,86, das die Konkurrenz um 5,9 % übertraf. Das Unternehmen erhöhte dann seine volle-jährliche vergleichbare EPS-Wachstumsprognose auf 8 % bis 9 %, von einem vorherigen Bereich von 7 % bis 8 %. Bildquelle: Getty Images.

Was dahintersteckt, ist nicht nur der Preissteigerung. Die Einheitseinheitenmenge wuchs global um 3 % – was bedeutet, dass die tatsächliche Nachfrage und nicht nur das Dollar-Mathematik zunimmt. Für neue Investoren ist die Einheitseinheitenmenge der Maßstab, der beweist, dass Preiserhöhungen Kunden nicht abgeschreckt haben. Coca-Cola gewann auch Wertanteile in den Bereichen Sekt, Wasser, Sportgetränke, Kaffee und Tee – ein seltener breiter Sweep.

Coca-Cola ist eine solide, langfristige Kaufanlage, die im Laufe der Zeit nur steigen wird.

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LONDON – Just weeks after Unilever announced the merger of its foods division with McCormick & Co., Associated British Foods has confirmed plans to separate its own foods business from fashion retailer Primark.

ABF announced last November it was contemplating splitting the two businesses, and said Tuesday the demerger was going ahead, with shareholders able to hold stakes in both publicly-listed entities.

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Wittington Investments, which is owned by the Weston family and has majority ownership of ABF, said it was “supportive of the proposed demerger,” and remains committed to maintaining majority ownership of Primark and the separate food company, which for the moment is called FoodCo.

The board said one-off separation and transaction costs are expected to be in the region of 75 million pounds, and the demerger will deliver a number of benefits to each business, making investing easier and more transparent for shareholders.

The board also said it was confident in the long-term prospects of both businesses.

Going forward, Primark and FoodCo will each be listed on the commercial companies category of the London Stock Exchange and, given their scale, ABF anticipates that both entities will be included in the FTSE 100 index of top-performing companies.

Following the demerger, Primark will retain its name, while FoodCo will be called Associated British Foods.

Primark has 486 retail stores across 19 markets, with approximately 9.5 billion pounds in annual revenue and more than 83,000 employees.

FoodCo operates globally across 521 countries, with approximately 9.8 billion pounds in annual revenue and more than 55,000 employees. Its main brands include Twinings tea, Patak’s sauces and Jordans breakfast cereals.

The separation of Primark from ABF is expected to be effected by way of a dividend demerger, which is set to become effective before the end of the 2027 calendar year.Primark

George Weston will serve as chief executive of FoodCo, while  Eoin Tonge will take up a similar role at Primark.

Weston, who is currently chief executive of ABF, said the separation was an important step in the company’s evolution.

“For our food business, the separation will enable greater understanding of the breadth and strength of our differentiated portfolio and its long-term growth opportunities as the only FTSE100 pure-play food producer,” he said.

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For Primark, Weston added, the separation will enable “the creation of appropriate governance to maximize the future potential offered by Primark’s powerful brand, strong customer proposition and opportunities in existing and new markets.”

In the first half ended Feb. 28, ABF said Primark sales grew 2 percent, with new store openings contributing 4 percent to growth. In the U.K., like-for-like sales grew 1.3 percent and Primark gained market share “in a difficult retail environment, reflecting strong progress to re-energize our customer proposition.”

In Europe, where consumer confidence remains weak, like-for-like sales declined 5.6 percent. The company said adjusted operating margin was 10.1 percent, and there was a “significant increase in investment across product, marketing, digital and technology to drive like-for-like sales growth.”

ABF group revenue, including food, was down 2 percent to 9.5 billion pounds, although the company said it was expecting an improvement in the second half.

Last month, Unilever confirmed the merger of its foods business with U.S. spices and flavors maker McCormick & Co., part of its shift to become a beauty- and wellness-focused powerhouse.

The combined foods business will be led by the McCormick chief executive and chief financial officers, with senior management representation from Unilever Foods.

It will house brands including McCormick, Knorr and Hellmann’s, and “high growth potential” names such as Cholula, Maille and Frank’s, as part of a global portfolio with combined revenues of $20 billion.

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Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide.

Unilever (LSE:ULVR) is exiting its Foods division through a merger with McCormick & Company, creating a combined global flavours-focused group. The deal marks a shift in Unilever’s portfolio away from staple foods and towards beauty, personal care, and wellbeing. Following the merger announcement, Unilever moved quickly to acquire US-based supplements player Grüns to grow its health and wellness presence.

Unilever is known for its broad mix of consumer brands across foods, home care, and personal care, and the McCormick deal would reshape that profile. The exit from Foods aligns the group more closely with beauty, personal care, and wellness categories that many global consumer companies are prioritising. For investors, LSE:ULVR starts to look less like a classic staples company and more like a focused brand owner in potentially higher margin, premium segments.

The Grüns acquisition gives Unilever a foothold in the US supplements space at a time when consumer interest in health, self care, and functional products remains strong. As these transactions progress, investors will be watching how Unilever executes on brand integration, capital allocation, and balance sheet flexibility, as it builds out a more concentrated beauty and wellbeing portfolio.

Stay updated on the most important news stories for Unilever by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Unilever.LSE:ULVR Earnings & Revenue Growth as at Apr 2026

We've flagged 2 risks for Unilever. See which could impact your investment.

Quick Assessment

✅ Price vs Analyst Target: At £43.13 versus a £52.59 analyst target, the price sits about 18% below consensus expectations. ✅ Simply Wall St Valuation: Shares are described as trading 24.2% below an estimated fair value, which supports a value angle. ❌ Recent Momentum: The 30 day return of roughly 10.8% decline shows recent sentiment has been weak.

There is only one way to know the right time to buy, sell or hold Unilever. Head to Simply Wall St's company report for the latest analysis of Unilever's Fair Value.

Key Considerations

📊 The shift out of Foods and into beauty, wellbeing, and supplements changes Unilever's mix and may alter how you think about its role in a portfolio. 📊 Watch how management handles integration of Grüns, progress on debt and cash flows, and whether the P/E of 19.0 stays in line with the new profile. ⚠️ One flagged risk is Unilever's high level of debt, which matters as it restructures and pursues further deals.

Story Continues

Dig Deeper

For the full picture including more risks and rewards, check out the complete Unilever analysis. Alternatively, you can check out the community page for Unilever to see how other investors believe this latest news will impact the company's narrative.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ULVR.L.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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Zusammenfassung (max. 500 Wörter)

Die vorgeschlagene Fusion zwischen McCormick, einem Gewürz-Marke, und der Lebensmittelsparte von Unilever, erzeugt bei Seeking Alpha-Analysten erhebliche Debatten. Während Befürworter ein potenzielles global führendes Unternehmen im Bereich der Aromen sehen, bestehen Bedenken hinsichtlich der Umsetzung und der inhärenten Risiken, die mit großen Fusionen in der Lebensmittelindustrie verbunden sind.

Justin Purohit glaubt, dass die Fusion eine Folge der Tatsache ist, dass traditionelle Lebensmittelunternehmen ihre Verhandlungsmacht verloren haben. Er sagt voraus, dass weitere Fusionen in der Branche stattfinden werden, wenn die anfängliche Kombination erfolgreich ist, warnt aber, dass die Geschichte zeigt, dass überdimensionierte Fusionen aufgrund fehlerhafter Umsetzung und Preisdruck oft den Wert zerstören. Er sieht das Potenzial für Synergien von rund 600 Millionen Dollar und den erhöhten Einfluss der Einzelhändler als positiv und stellt ein führende Positionen in den Bereichen Soßen, Gewürze und Condiments in den Mittelpunkt.

Wolf Report nimmt eine deutlich vorsichtigere Haltung ein und drückt erhebliche Risiken aus, die mit der unmittelbaren negativen Reaktion des Marktes auf die Aktienkurse verbunden sind. Er hebt Unilevers jüngste Schwierigkeiten hervor, die sich aus der Spaltung der Eisdielinie ergeben, und betont die komplexe Rechtsstruktur – ein Reverse Morris Trust (RMT) –, die erhebliche Risiken mit sich bringt, darunter hohe Transaktionskosten, Eigenkapitalverlust und Beschränkungen der weiteren Transaktionen. Er betrachtet die Fusion grundsätzlich negativ, wie er sich ebenfalls über Unilevers Eisdielösungserwerb geäußert hat.

Gytis Zizys bietet eine ausgewogenere Perspektive. Er sieht die Fusion für Unilever als positiv, da es es Unilever ermöglicht, seine Abläufe zu rationalisieren, sich auf hochmargenbasierte Segmente zu konzentrieren und die Kontrolle über die neu genannte Einheit zu behalten. Für McCormick verspricht die Fusion eine Erweiterung über sein Kerngeschäft mit Gewürzen hinaus in eine breitere Palette von Lebensmittelprodukten. Er räumt jedoch ein, dass die McCormick-Aktionäre erhebliche Kontrolle verloren haben.

Die Analyse deutet darauf hin, dass die Fusion andere große Konsumgüterkonzerne wie Nestlé, Kraft Heinz und General Mills dazu zwingen könnte, ihre Strategien, insbesondere im Hinblick auf ihre Produktangebote und den Erhalt von Regalplätzen in einem sich verändernden Verbraucherumfeld, neu zu bewerten. Die Analysten verweisen auf einen breiteren Bildschirm der Top-Verpackungs- und Körperpflegeprodukte sowie auf spezifische Nachrichtenartikel über die Leistung von Konsumgütern.

Wesentliche Risiken, die hervorgehoben werden:

• Ausführungsrisiko: Die Geschichte von Mega-Fusionen, die aufgrund fehlerhafter Ausführung scheitern.
• Synergieüberschätzung: Das Ziel von 600 Millionen Dollar für Synergien wird in Frage gestellt.
• Rechtliche Komplexität (RMT): Die Reverse Morris Trust-Struktur führt zu erheblichen rechtlichen und finanziellen Herausforderungen.
• Marktreaktion: Negativer erster Marktagspiegel spiegeln Anlegerbedenken wider.

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Zusammenfassung:

Q1 2026 zeigte eine insgesamt schwache Performance an US-Aktien, wobei der S&P 500 um rund 4,6 % an Wert verlor. Der Konsumgütersektor erwies sich jedoch überraschend als starker Bereich, angetrieben durch eine Investorenrotation in defensive Anlagen. Dieser Sektor übertraf sowohl Energie- als auch Rohstoffwerte und erlebte erhebliche Zuflüsse.

Der Consumer Staples Select Sector SPDR ETF (XLP) war ein herausragender Performer und stieg um fast 5,5 %, da Investoren stabile Unternehmen mit vorhersehbaren Erträgen suchten. Innerhalb von XLP erzielten Unternehmen wie Bunge Global (BG) und Archer-Daniels-Midland (ADM) erhebliche Gewinne aufgrund starker Rohstoffhandel und Verarbeitungsmargen, während Target (TGT) und Kroger (KR) von einer widerstandsfähigen Konsumentennachfrage und verbesserten Besuchsraten profitierten. Hershey (HSY) entwickelte sich ebenfalls ausgezeichnet.

Umgekehrt kämpften mehrere Lebensmittelhersteller, was auf Margendruck und sinkende Umsätze zurückzuführen ist. General Mills (GIS), Campbell Soup (CPB) und McCormick (MKC) erlebten erhebliche Verluste und deuteten auf Herausforderungen im Sektor hin. Auch Discount-Händler wie Dollar Tree (DLTR) verzeichneten einen starken Rückgang, was auf Schwierigkeiten bei einkommensschwächeren Konsumenten hindeutet. Estée Lauder (EL) erlitt einen dramatischen Rückgang aufgrund schwacher internationaler Nachfrage, insbesondere in asiatischen Märkten.

Analysten äußern vorsichtige Bedenken hinsichtlich des Konsumgütersektors. Ein Analyst stellte fest, dass "tief zurückgesetzte Erwartungen, komprimierte Bewertungen und hohes Short-Interesse" vorliegen, was eine "asymmetrische Risiko-/Ertragsstruktur" schafft. Ein weiterer, pessimistischerer Blickwinkel betonte "strukturelle Nachteile" innerhalb der Branche und führte zu einem vorsichtigeren Ansatz gegenüber XLP und KXI.

Trotz der insgesamt starken Sektorleistung zeigten Investitionstrends eine breitere Tendenz zu Ausflüssen aus dem S&P 500 (SPY). Der XLP-ETF selbst verzeichnete einen bemerkenswerten Ausfluss und zeigte eine konzentrierte Verlagerung der Investitionen.

Mehrere ETFs bieten Zugang zum Konsumgütersektor, darunter der Vanguard Consumer Staples ETF (VDC), der iShares U.S. Consumer Staples ETF (IYK) und die First Trust-Fonds (FXG, FTXG, PBJ, KXI). Diese ETFs ermöglichen es Investoren, ihre Beteiligung an diesem defensiven Sektor zu diversifizieren. Neuere Artikel erörterten Fusionen zwischen McCormick und Unilever Foods, lieferten Analystenberichte von Hershey Company’s Investor Day und stellten Hersheys Strategie vor, die auf “besser-für-Sie” Optionen und funktionale Snacks setzt. Die wöchentlichen ETF-Flüsse zeigten Ausflüsse in vielen Sektoren, wobei der Finanzsektor die Zuflüsse anführte.

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Unilever-McCormick deal 'not compelling value' but 'makes sense', say investment banks Proactive uses images sourced from Shutterstock

Unilever PLC (LSE:ULVR) shares continued to fall on Wednesday as analysts appeared to be split on the longer-term value of its deal to spin off its foods arm into merger with McCormick & Co Inc (NYSE:MKC).

Both stocks dropped 7% on Tuesday as investors questioned value creation and the complex structure, with the FTSE 100 group falling another 2.25% to 4,104p the day after.

JPMorgan said the transaction marks a “milestone transformation” and “makes strong sense” strategically to becoming a focused home and personal care (HPC) company, though observed that European investors seemed to be concerned about owning a US-listed food entity with relatively high leverage and more than €6 billion of tax and cash costs.

"From a strategic standpoint, both deals make strong sense in terms of category and geography complementarity for NewFoodCo while allowing Unilever to accelerate its repositioning in higher growth and higher value-add categories."

Updating its numbers, the US bank said "the bridge to value creation from the deal hinges on re-rating of the core HPC company which we believe should be well within reach given the recent growth track record and ongoing elevation of marketing and innovation".

At close of day, the market seems to ascribe an multiple on the core business of 12.5 earnings, "which leaves room for re-rating considering the company has been one of the few to grow consistently in the wider beauty space".

"We concede that short-term low visibility on the Middle East impact on Asia demand and cost inflation. Yet we think the shares have been overly punished on what is arguably the better way to split foods."

Barclays said the reaction was driven by “overhang concerns”, deal complexity and the long timeline to completion in mid-2027.

However, it agreed the sell-off looks “overdone”, with Unilever securing a stronger valuation than expected and accelerating its shift towards higher-growth personal care categories.

UBS said the deal was "not as easy as it seems" and flagged three risks: foods may be valued lower due to weaker growth and health trends; separating it could create costly operational dis-synergies; and Unilever may lose a stable, cash-generative business, reducing overall earnings quality and resilience.

Deutsche Bank acknowledged that "in the long run the Foods and HPC business needed to separate", analysts said there "is a large question mark over timing".

"The deal, as it stands, also appears meaningfully dilutive to remaining Unilever shareholders with the capitalised value transferred to the new combined foods business, though this will have more leverage and less synergies than expected."

Story Continues

The German bank argues that an ongoing channel shift in HPC has "pressured Unilever and this looks like a catalyst across the sector".

It estimates that the combined foods business would be on an implied 10x EBITDA with around 3x net debt/EBITDA in 2029.

"In our view, it's not compelling value for Unilever shareholders, but it might just be the least worst option."

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Unilever (LSE:ULVR) plans to combine most of its food business with McCormick through a Reverse Morris Trust transaction. The deal would create a large, focused player in seasonings, sauces, and condiments with Unilever and its shareholders holding a controlling stake. The transaction represents a major shift in Unilever's portfolio toward beauty, personal care, and wellbeing.

For Unilever, food has long been a core pillar alongside home care, beauty, and personal care, and management has been reshaping the portfolio toward higher margin and faster evolving categories. McCormick brings a concentrated presence in seasonings and flavor solutions, while Unilever contributes a broad mix of sauces and condiments brands. Together, the combined business sits at the intersection of at home cooking, snacking, and convenience food trends.

For shareholders in LSE:ULVR, the Reverse Morris Trust structure means ongoing exposure to the new food entity while also tilting the remaining group more firmly toward beauty, personal care, and wellbeing. The key questions now revolve around execution, integration of brand portfolios, and how the simplified Unilever might position itself in consumer health and personal care over time.

Stay updated on the most important news stories for Unilever by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Unilever.LSE:ULVR Earnings & Revenue Growth as at Apr 2026

📰 Beyond the headline: 2 risks and 5 things going right for Unilever that every investor should see.

This planned Reverse Morris Trust with McCormick would reshape Unilever into a more focused beauty, personal care, home care, and wellbeing group while still giving shareholders a 65% stake in a sizeable food company. Unilever receives about US$15.7b in cash plus McCormick equity, which could give it room to simplify the balance sheet or reinvest in its remaining brands. On the other side, the combined food business would bring together Unilever’s sauces and condiments with McCormick’s spices and flavor solutions, creating a large specialist that competes more directly with groups such as Kraft Heinz and Nestlé in pantry staples. For you as an investor, the trade off is between reduced diversification at the Unilever parent level and a cleaner story focused on personal and home care, alongside continued exposure to food through the new entity.

How This Fits Into The Unilever Narrative

The combination of most Foods with McCormick aligns with Unilever’s existing plan to simplify the portfolio and concentrate on higher margin beauty, personal care, and wellbeing categories. Analysts had highlighted scale benefits from keeping large food brands in house, so partially separating them into a shared vehicle could challenge assumptions about how much operating leverage Unilever keeps. The use of a Reverse Morris Trust, with tax considerations and a 65% ownership stake in the combined company, may not be fully reflected in earlier narratives that focused mainly on divestments like Ice Cream.

Story Continues

Knowing what a company is worth starts with understanding its story. Check out one of the top narratives in the Simply Wall St Community for Unilever to help decide what it's worth to you.

The Risks and Rewards Investors Should Consider

⚠️ There is integration and execution risk if combining brand portfolios and supply chains across Unilever Foods and McCormick proves more complex or costly than expected. ⚠️ A more concentrated Unilever group could be more exposed to pressures in personal care and home care if the new food entity trades and performs independently. 🎁 The US$15.7b cash component gives Unilever flexibility to address debt, fund buybacks, or reinvest in core categories, depending on management’s priorities. 🎁 A large, focused flavors and condiments company could unlock category specific efficiencies and create a clearer growth profile than Unilever’s previous broad food portfolio.

What To Watch Going Forward

From here, keep an eye on the final transaction terms, including the exact assets contributed, leverage in the combined food company, and any guidance on cost savings. Investor reaction to the new food entity’s governance and capital allocation framework will also matter, given Unilever and its shareholders hold 65%. For the remaining Unilever group, watch how management outlines capital priorities, brand investment, and any further portfolio moves around beauty, personal care, and wellbeing once Foods is largely separated.

To ensure you're always in the loop on how the latest news impacts the investment narrative for Unilever, head to the community page for Unilever to never miss an update on the top community narratives.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ULVR.L.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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Anglo-Dutch multinational Unilever agreed Tuesday to combine its food division with spice maker McCormick. The cash-and-stock deal would create a company with roughly $20 billion in annual revenue and a pantry’s worth of brands, including French’s mustard, Hellmann’s mayonnaise, Old Bay seasoning and Knorr soup mixes.

Investors are not biting. Shares in Unilever fell 7.3% in London, and McCormick sank 6.3% in New York, erasing billions in market value. Here’s why investors were left with a bad taste in their mouths.

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End of an Era

There’s been a lot for big food conglomerates to digest lately. Less affluent customers have curbed spending and switched to store brands after years of inflationary price hikes turned grocery shopping into a ritual slap in the face for many. And with the proliferation of GLP-1 weight-loss drugs, which Cornell researchers found result in an average 5.3% decline in household grocery spending, many people are simply buying less food. That leaves companies trying to eke out a more profitable foothold in this fickle environment.

In February, PepsiCo said it was cutting snack prices after earlier hikes triggered a backlash. Kraft Heinz pulled the plug on a planned breakup after sales deteriorated so much that the spinoff’s investor appeal waned. Others successfully closed acquisitions, like Mars’ purchase of Kellanova and Ferrero’s deal for WK Kellogg. And still others, like Campbell’s, GeneralMills and JMSmucker, have divested brands. For its part, Unilever spun off its ice cream business.

Tuesday’s deal would see the firm “sharpening” into a $45 billion “pure play” in global beauty, wellness and personal and home care, a noteworthy development considering Unilever has been in the food business for almost a century. But some investors worry McCormick is biting off more than it can chew:

While McCormick will pay Unilever $15.7 billion in cash and $29.1 billion in stock equivalent for the Anglo-Dutch firm’s food arm, Unilever and its shareholders will receive 65% of the combined company. The deal is structured as a tax-friendly Reverse Morris Trust, which essentially allows a spinoff that’s being acquired in theory to own the majority of the new entity. Barclays estimated the value of Unilever’s food business, which is dominated by Hellmann’s and Knorr, to be $32.3 billion to $35.8 billion, more than double McCormick’s $14.2 billion market capitalization.

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Take Your Pick: Analysts at RBC, left “unimpressed,” wrote: “What we really can’t get our heads round is why is Unilever disposing of a business dominated by two brands, of which it owned 100%, for a minimal control premium and leaving its shareholders with a 55% shareholding in a sprawling food business.” On the other hand, Deutsche Bank analysts said the new McCormick could have “a path to potentially transformative scale” and give the spice maker added punch via the condiment market, a rare bright spot for food conglomerates.

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