- McCormick announced Wednesday morning it will no longer pursue a deal to acquire British manufacturer Premier Foods. McCormick said after completing due diligence, it would not be able to make an offer that would be acceptable to both Premier’s board and McCormick shareholders.
- Premier turned down several offers from McCormick, with the latest worth 65 pence a share, or around £537 million ($763 million) in total.
- Premier has a positive outlook on its future as an independent company, though its share price plunged about 25% on McCormick's news.
McCormick did, and likely still does, have goals of expanding into the U.K. grocery market, but the company has decided it won't be doing so via an acquisition of Premier Foods.
McCormick has been keen on acquisitions, having enacted three strategic and profitable takeovers last year to expand in different regional and product markets. The company isn't likely to let this failed takeover derail any of those expansion plans. If McCormick is still motivated to move into the U.K., it could propose the acquisition of another British company at some point in the future.
Prior to takeover discussions, Premier had announced plans to expand its cake business in the U.S. McCormick's distribution network and capital infusion could have more easily made this plan a reality for Premier, but Premier seems confident in pursuing the expansion on its own.