McCormick & Company (NYSE: MKC) announced it will combine with Unilever's (NYSE: UL) foods business in a transaction valued at approximately $44.8 billion, creating a company with about $20 billion in combined fiscal year 2025 revenue.

Under the agreement, Unilever and its shareholders will receive shares equating to 65% of the combined company's equity, equivalent to $29.1 billion based on McCormick's recent stock price of $57.84. Unilever will also receive $15.7 billion in cash, subject to closing adjustments.

The transaction excludes Unilever's food operations in India, Nepal and Portugal, along with its Lifestyle & Nutrition business and certain other units. The deal includes Unilever's Knorr and Hellmann's brands, which represent approximately 70% of the foods unit's sales.

Following the transaction's completion, Unilever shareholders are expected to own 55.1% of the combined entity, McCormick shareholders will own 35%, and Unilever will retain a 9.9% stake. The companies project annual cost synergies of $600 million net of reinvestments, with approximately two-thirds achieved by year two.

McCormick CEO Brendan Foley will remain chairman, president and chief executive officer of the combined company. The business will maintain its global headquarters in Hunt Valley, Maryland, with an international headquarters in the Netherlands.

The transaction is structured as a Reverse Morris Trust and is expected to be tax-free for Unilever and its shareholders under U.S. federal income tax rules. McCormick has secured $15.7 billion in committed bridge financing from Citigroup, Goldman Sachs and Morgan Stanley.

The deal requires McCormick shareholder approval, regulatory clearances and other customary conditions. The companies expect to close the transaction by mid-2027.