LONDON, U.K.: Unilever is in discussions to sell its food business to U.S.-based McCormick & Company, in a potential deal that would accelerate the British consumer goods group's shift toward faster-growing segments.

The company confirmed that it had received an offer from McCormick, best known for its spices and sauces, and said talks were ongoing. McCormick also confirmed it was engaged in discussions regarding a possible transaction.

The move aligns with CEO Fernando Fernandez's strategy to refocus Unilever on higher-growth areas such as personal care and household products, following the spin-off of its ice cream business last year.

Unilever's food division, which includes brands such as Hellmann's, Knorr, and Marmite, generated more than 12.9 billion euros (US$14.91 billion) in sales in 2025, accounting for roughly a quarter of the company's total revenue. However, growth in the segment has lagged behind the broader business, as consumers increasingly move away from processed foods.

"We think it is sensible that Unilever is looking at options for its food business," said Richard Saldanha, global equity portfolio manager at Aviva, a Unilever investor. "It's clear the company wants to focus on areas such as personal care and beauty where underlying category and volume growth are more attractive."

The potential deal would be a significant undertaking for McCormick, which has a market capitalisation of about $14.5 billion, far smaller than the estimated value of Unilever's food unit. Analysts at Barclays have valued the division at between 28 billion euros and 31 billion euros.

That scale raises questions about deal structure and potential benefits. "This potential deal seems complex. McCormick is much smaller than Unilever Food - Unilever Food generates around 3x the profit of McCormick - so unclear what value can be created as a combined entity, and what structure can be proposed that offers value to shareholders," said Tineke Frikkee, a portfolio manager at W1M.

Unilever's shares rose 1.3 percent following news of the talks, indicating a cautious market response. The discussions also come shortly after the company completed the spin-off and listing of its ice cream business, a process that weighed on its stock.

According to a person familiar with the matter, McCormick's offer was unsolicited. Both companies said there is no certainty that a deal will be reached and did not disclose financial details.

Analysts and bankers said any agreement could take the form of a "Reverse Morris Trust transaction," a structure that allows a company to spin off a business and merge it with another entity in a tax-efficient manner.

"A deal would likely be structured along the lines of a Reverse Morris Trust transaction, with Unilever essentially spinning off its Food division, to then merge with McCormick and Unilever shareholders retaining the majority of the combined entity," Bernstein analysts said.

The confirmation of talks follows media reports that Unilever was exploring options for its food division. Earlier this week, the Financial Times reported that the company had considered merging its food assets with Kraft Heinz's condiments business, though those discussions have since ended.