UK Watchdog Opens Formal Probe Into McCormick's $45 Billion Unilever Foods Deal, Sets 11 November Deadline
The CMA's Phase 1 review will test whether combining Knorr, Hellmann's, French's and Frank's RedHot lessens competition, with Colman's already put up for sale to head off mustard concerns.
What Happened
The UK Competition and Markets Authority has launched a Phase 1 investigation into McCormick’s planned combination with Unilever’s foods business, the regulator said on 16 September. The CMA must decide by 11 November whether the deal could result in a substantial lessening of competition in any UK market, or whether to refer it for an in-depth Phase 2 review. The regulator had invited comments on 21 July, with responses due by 5 August.
The transaction, announced in March, values Unilever’s food operations at about $45 billion and would combine brands including Knorr and Hellmann’s with McCormick’s French’s mustard and Frank’s RedHot. McCormick will pay $15.7 billion in cash, with Unilever shareholders owning 55% of the combined company and Unilever itself retaining a 9.9% stake. The companies expect about $300 million of annual cost savings and completion by mid-2027. Unilever has already put its Colman’s mustard brand up for sale to address the obvious overlap with French’s.
Why It Matters
Mustard is the tell, but sauces are the substance. Colman’s and French’s together would have dominated UK mustard, which is why Unilever moved pre-emptively to sell. The harder questions concern condiments, cooking sauces and seasonings more broadly, where Hellmann’s, Knorr and McCormick’s herbs-and-spices range each hold strong positions and retailers will argue about shelf leverage.
A Phase 2 referral would push the timetable. The companies have targeted a mid-2027 close. A full in-depth review typically adds around six months and could bring divestiture demands beyond Colman’s. Even a Phase 1 clearance with undertakings would set the template for other regulators reviewing the same combination.
The deal is central to both companies’ strategies. For Unilever, exiting food completes its shift to beauty, personal care and home products. For McCormick, the combination transforms a spice company into a global flavour and sauces group with a 55% Unilever-shareholder base. Neither side can afford a prolonged regulatory stall.
- Phase 2 referral: An in-depth review would delay closing well beyond mid-2027 and raise the odds of further brand disposals.
- Remedy creep: If the CMA extracts divestments in sauces or seasonings, the $300 million synergy case weakens.
- Regulatory contagion: Findings in the UK often inform reviews in the EU and elsewhere, compounding any delay.
- Pre-emptive remedy: Putting Colman's up for sale before the probe began shows the parties have anticipated the main concern.
- Limited horizontal overlap: Beyond mustard, McCormick's core spices and Unilever's mayonnaise and stock cubes are largely complementary.
- Strategic clarity: Both companies have strong incentives to accept reasonable undertakings and keep the mid-2027 timetable.