McCormick (MKC) to combine with Unilever's (ULVR LN) Foods Business
Importance
Level 1
- Under the terms of the agreement and upon closing of the transaction, Unilever and its shareholders are expected to receive shares equating to 65.0% of the fully diluted combined-company outstanding equity, equivalent to USD 29.1bln based on McCormick's one-month volume-weighted average price of USD 57.84.
- Unilever will also receive USD 15.7bln in cash, subject to certain closing adjustments. This implies an Enterprise Value for Unilever Foods of ~USD 44.8bln, or approximately 13.8x fiscal year 2025 EBITDA. In addition, this reflects an enterprise value for McCormick of ~USD 21.0bln, or approximately 13.8x fiscal year 2025 EBITDA.6
- Expected to be Accretive to McCormick's Net Sales Growth Rate, Operating Margin and Adjusted EPS in First Full Year.
- Expected Annual Run-Rate Cost Synergies of USD 600mln Net of Reinvestments; Expect to Achieve by Year 3, with Approximately Two-Thirds by Year 2
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