Unilever, McCormick Agree to a Deal to Create $65 Billion Food Giant

On Tuesday, Unilver said it will merge its food business with spice maker McCormick in the second-largest food transaction in history, a deal that will create a company worth roughly $65 billion.

The transaction will be structured as a so-called Reverse Morris Trust (RMT), which offers tax benefits. Unilever will spin off the food division and then merge it with the Cholula hot sauce owner. The deal is the largest RMT transaction involving a European company, said Rothschild, which served as joint-lead financial adviser to McCormick.

Unilever and its shareholders will have a 65 percent stake in the fully diluted combined-company outstanding equity, equivalent to $29.1 billion based on McCormick's one-month volume-weighted average price of $57.84, the companies said in a joint statement.

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