The Competition and Markets Authority (CMA) has formally launched a Phase 1 merger inquiry into McCormick & Company’s proposed acquisition of the majority of Unilever’s Foods business

The investigation, opened today and with a decision deadline set for 11 November, will assess whether the transaction creates a relevant merger situation under the Enterprise Act 2002 and, if so, whether it could result in a substantial lessening of competition in UK markets.

The deal would bring together major brands including Unilever’s Knorr, Hellmann’s and Colman’s with McCormick’s McCormick, Schwartz, Frank’s RedHot and Ducros.

The companies announced the proposed combination in March, valuing Unilever Foods at around $44.8bn and creating a group with annual revenues of approximately $20bn.

Under the proposed structure, Unilever shareholders would own about 55.1% of the combined business, McCormick shareholders around 35%, while Unilever would initially retain a 9.9% stake to be sold down over time. Unilever and its shareholders are also due to receive $15.7bn in cash.

The CMA's Phase 1 review is the formal start of its assessment and does not represent a finding that the transaction raises competition concerns or indicate that it will be referred to a Phase 2 investigation. The regulator will consider the potential impact on competition across relevant UK food markets, including the implications for consumers, retailers and foodservice customers.

Potential competition issues have already prompted Unilever to put its Colman’s mustard brand up for sale. Rothschild is understood to be approaching potential buyers for the brand, which was founded in 1814. McCormick already owns French’s, a major mustard brand, making the sale a potential step towards addressing overlap between the two businesses.

The transaction is being reviewed by regulators in multiple jurisdictions. Unilever’s Foods business includes brands such as Hellmann’s, Knorr, Marmite and Pot Noodle, while Maryland-based McCormick is one of the world’s largest producers of spices, seasonings, condiments and flavour products.

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