McCormick will buy Unilever’s food business for a combination of cash and equity, in a deal that values the Unilever unit at nearly $45 billion, the two food companies announced.

To buy most of Unilever Foods’ portfolio, including Hellmann’s mayo and U.K. favorite Marmite, McCormick will pay $15.7 billion in cash, and Unilever and its shareholders will own 65% of the combined company.

The deal will add billions of dollars in annual sales for McCormick and expand the spice giant’s portfolio further into spreads and condiments. It already owns Frank’s RedHot and Cholula hot sauces.

For Unilever, divesting much of its food business allows the company to focus on its personal care segment, which is growing faster. In December, Unilever spun off its ice cream business, now trading separately as Magnum Ice Cream Company.

The deal follows a broader trend among Big Food. Many packaged food and beverage companies have been getting leaner through divestitures and spinoffs as consumers buy less of their products. In 2024, nearly half of mergers and acquisitions activity in the consumer products industry came from divestitures, according to consulting firm Bain.

Nestle shares rose 3% Thursday after the maker of Nescafé and KitKat reported organic sales growth for the fourth quarter that beat analyst forecasts.

The closely watched organic growth rate came in at 4%, beating a FactSet consensus of 3.55%. For 2026, Nestle said it is targeting organic sales growth of 3% to 4%, along with an improvement in its underlying trading operating profit margin, which stood at 16.1% in 2025.

The Vevey, Switzerland-based company also announced it was planning to sell its remaining ice cream business to Haagen-Dazs owner Froneri, a joint venture by PAI and Nestle. 

In addition, Nestle said it started the formal process to shed its water business earlier in the first quarter, and expects the business, which holds brands such as Henniez and Perrier to be deconsolidated by 2027. 

Shares were last trading up 2.6% and the stock is around 2% so far this year.

The company, under its new leadership duo of CEO Philipp Navratil and Chairman Pablo Isla, a former Inditex executive, have been focusing on streamlining the sprawling consumer giant, after years of operational and share-price underperformance. 

“We are accelerating our strategy. We are focusing our portfolio on four businesses, led by our strongest brands, with prioritized resources and a simplified organization,” Navratil said in a statement.

The CEO later told analysts that the remaining ice cream business was “strong, but small and a distraction” for the company.

Nestle’s portfolio plans were “little changed and undramatic for now,” analysts at Jefferies said. They noted that there had been some anticipation and uncertainty ahead of the earnings report, but the CEO had left most key ambitions unchanged.

UBS wrote in a note that the results reflected early signs of progress while pointing to the strength of confectionery, beverages and petcare as being the biggest drivers of growth in the fourth quarter. 

An infant formula recall, which has also engulfed rival Danone and privately held Lactalis in France, has provided a stumbling block for restoring trust in the business.

Nestle said Thursday its organic growth guidance includes a negative 20 basis point impact from the recall and flagged 1.7 billion Swiss francs in restructuring items, mainly due to the recall.