A consultation around the proposed merger between McCormick and Unilever’s food businesses has begun.
The UK’s Competition and Markets Authority (CMA) is inviting interested parties to comment on the potential impact that the deal may have on competition in the UK. This consultation closes on 5 August.
Assessing competitiveness
Much like other jurisdictions, the UK aims to prevent deals that will limit competition and harm consumers. This could involve raising prices or lowering the quality of goods.
When the CMA starts investigating a merger, it begins with information gathering, asking the businesses involved to explain who they are and what they do.
They may also ask others to comment on the merger. It is currently at this phase with the McCormick-Unilever merger.
Phase one explores whether a merger has a realistic chance of substantially lessening competition. Some companies will be asked to provide remedies to the problems identified in the merger. Following this, most mergers are cleared. A few are passed on to a more in-depth phase two review.
Inside the Unilever-McCormick deal
Earlier this year, UK FMCG giant Unilever agreed to merge its food businesses with US-based company McCormick, excluding India. The deal, once completed, would mark a near-total end of Unilever’s presence in food.
The deal has proved controversial. Following the announcement, Unilever’s share price dropped.
Furthermore, key investors have criticised the decision to merge; major investor Terry Smith, who sold his entire stake in the company, accused it of abandoning traditional shareholders in favour of activist-driven deals. Later, he said the company had misled shareholders.
According to investment research company Morningstar, completion of the deal is expected by mid-2027.
