McCormick readies to become area’s second-largest public company

Baltimore’s largest pantry built itself up through a series of deliberate acquisitions, adding a spice here, a sauce there. But McCormick & Co.’s massive deal with Unilever is by far its most ambitious — and will require rearranging the cupboard.

That could ultimately spell layoffs, though the company says it will be “business as usual” until McCormick formally acquires the foods division of Unilever, the European consumer goods giant, next summer.

Hunt Valley-based McCormick, the world’s largest spice producer, is expected to nearly triple in size with the combination, first announced in March. Executives laid out the road map Wednesday during a Barclays-hosted consumer staples conference in Boston.

Unilever, known for personal care brands such as Dove, will need to fully spin off its food arm. Those food products, including Hellmann’s Mayonnaise, will then fall under McCormick’s umbrella, but integration will continue through the end of the decade, executives said.

Brendan Foley, who will remain chairman, president and CEO of the new company, positioned McCormick as well suited for growth and said the new company will benefit from its combined network.

He cited Hellmann’s in pointing to “mayonnaise growth” in U.S. households and elsewhere, and he repeated a common chorus: that the flavor market is resilient, even as eating habits shift. During about 20 minutes of remarks, he said “flavor” dozens of times. Trends, such as cooking at home and eating healthier, favor McCormick, he said.

“Gen Z, who are new and future consumers, overindex to flavor,” he said.

Foley said the merger will offer “meaningful cost synergies,” and Chief Financial Officer Marcos Gabriel detailed how the company expects to save $600 million annually. About 10% will come from manufacturing and logistics and 40% from procurement. The other half will come from everyday business expenses, including “economies of scale” benefits and “operational efficiency across functions and countries.”

Foley has highlighted McCormick’s “very strong track record of retaining talent through transactions,” but mergers often result in job loss. If someone at Unilever is doing the same job as someone at McCormick, one of those jobs might disappear.

“There’s probably some redundancy in personnel between the two companies,” said David Kass, a University of Maryland Robert H. Smith School of Business professor.

However, he said, potential layoffs may be more pronounced among Unilever employees.

McCormick had 14,100 employees as of last year, according to federal filings, but the company declines to break down the location of its workforce. It’s a major employer in Baltimore County, with over 2,500 workers as of last year, according to county data.

After the combination is complete, McCormick is expected to be the second-largest publicly traded company in the Baltimore area by annual revenue, trailing only Constellation Energy. Last year, McCormick brought in about $7 billion in revenue, just behind T. Rowe Price and ahead of Under Armour. That number will grow to more than $20 billion, executives said.

McCormick, like many companies that rely on imports, was hit by tariffs last year. It’s seeking a $31 million refund from the federal government after the U.S. Supreme Court ruled this year that some of President Donald Trump’s tariffs were unlawful.

The company’s stock value has dipped in the five months since the Unilever announcement, but some analysts remain bullish — especially given McCormick’s history with acquisitions. Over the years, the company has added products such as Old Bay, French’s and Cholula.

TD Cowen analysts described McCormick as “one of the best” merger-and-acquisition companies within the consumer packaged goods industry.

“We believe the Unilever Foods merger will create significant shareholder value over time through synergy capture,” analysts wrote, “and that the company will regain competitiveness in its home market.”