The $44.8 billion merger between McCormick & Co. and Unilever’s food division could face an in-depth investigation in the U.K. after the country's regulator ruled the deal stands to hurt competitors in areas such as dry ingredients and sauces.
The Competition and Markets Authority said the transaction would give “rise to a realistic prospect of a substantial lessening of competition” in the U.K. The regulator gave McCormick and Unilever until Nov. 18 to address its concerns; otherwise, it will send the case for further investigation.
McCormick announced in March it would buy the majority of Unilever’s food business, including Hellmann’s mayonnaise and Knorr sauces. The deal, expected to be completed by mid-2027, is set to significantly expand McCormick’s international reach and create a global condiments and ingredients giant.
The CMA opened the first phase of its investigation into the transaction in September.
During its review, the CMA found the merged company would be “by far” the largest supplier of dry mixes and sauces.
While private label and branded competitors, including Nestlé’s Maggi dry ingredient mixes, provide some competition, it’s not enough to offset the strong position the merged entity would have in the market, the regulator said.
In a statement to Food Dive, Unilever said the decision “is an expected step in the regulatory process, and we are working constructively with the CMA on a suitable remedy.”
McCormick, in a separate statement, echoed Unilever’s comments, while adding that “we continue to make good progress on regulatory approvals globally, reinforcing our confidence in a timely closing.”
In August, Unilever announced it was proactively looking to sell the Colman’s brand and assets, which include dry mixes and sauces, to address potential competition concerns. “Discussions with potential buyers are progressing well,” the London-based company said.
The CMA also reviewed the overlap the new food company would have in mustard in the U.K., though it did not express concerns that the merged company would harm its competitors.
McCormick supplies American-style mustard under the French’s brand and Unilever provides English-style mustard through Colman’s. Unilever also owns French-style mustard brand Maille. The different variations require supermarkets to carry each one, limiting competition between the mustards, CMA noted.
“The CMA found no realistic prospect of competition concerns in relation to mustard,” the regulator said.
