Unilever, the London-headquartered multinational, agreed in March to sell its long-established food division to US-based McCormick for £33 billion.
The company is reportedly preparing to sell Colman’s as a standalone business to reduce potential competition concerns linked to the transaction. McCormick already owns French’s, one of the leading mustard brands in the United States, making the separation of Colman’s a possible solution to regulatory scrutiny.
The deal will move a number of major food brands into McCormick’s portfolio, including Marmite, Knorr, Hellmann’s, Frank’s RedHot and Pot Noodle. The disposal forms part of chief executive Fernando Fernandez’s strategy to concentrate Unilever on beauty, wellbeing and personal care.
According to Sky News, Rothschild has been appointed to identify potential purchasers for Colman’s. The brand’s current value remains “unclear”, however, as discussions continue.
Colman’s was established in Norwich in 1814 and has since become a familiar name among British consumers. It remains the country’s leading mustard brand, holding more than half of the national market.
A Unilever spokesperson said: “A decision has been taken to market the Colman’s brand and assets to potential buyers in order to proactively seek to address potential competition concerns from the planned combination of Unilever Foods and McCormick.
“Discussions are ongoing and the operations continue as usual.”
Under the proposed transaction, Unilever shareholders will retain a 65% interest in the newly created company. McCormick will hold the remaining 35%.
Dan Coatsworth, head of markets at AJ Bell, told the press: “Corporate tie-ups such as Unilever’s food arm and McCormick are rarely a case of bolting two businesses together and running everything as normal. It’s natural to review the enlarged operations and to jettison anything deemed non-core.
“There is speculation that Unilever and McCormick have put Colman’s mustard up for sale. Colman’s is synonymous with a Sunday roast or a ham sandwich in the UK but is less known beyond these shores. McCormick might believe the British brand doesn’t cut the mustard or add significant value to its portfolio. After all, McCormick already owns French’s and a host of other mustard-related sauces and powders.”
He added: “There won’t be a shortage of interested parties lining up to own the quintessential British brand, with Premier Foods and Associated British Foods likely to be in the frame as possible buyers.”
The proposed sale highlights the continuing reshaping of the food and beverage industry, as businesses reassess brand portfolios, supply chains and market positioning. It also reflects wider food manufacturing trends, food processing technology investment and food distribution trends, alongside developments in food and drink industry innovation, food and drink sustainability, food and drink regulations, food and drink packaging, food and drink marketing and food and drink consumer trends.
