The London-based multinational agreed to sell its historic food division to US firm McCormick in March for £33 billion.
Unilever will be hoping to quell any potential competition concerns arising from the deal by spinning off Colman’s into an independent entity, as McCormick already owns US mustard powerhouse French’s.
The sale will see well-known food brands such as Marmite, Knorr, Hellmann’s, Frank’s RedHot and Pot Noodle transferred to the McCormick portfolio, as CEO Fernando Fernandez pivots Unilever’s focus towards beauty, wellbeing and personal care.
Sky News reports that bankers from Rothschild have now been tasked with finding a buyer for Colman’s, with the brand’s valuation remaining “unclear” at this stage.
Founded in Norwich in 1814, Colman’s has grown into a household name in Britain and remains the undisputed leader in the mustard category, commanding more than 50% of the market nationally.
On the planned sale, 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.”
Unilever’s sale of its sizeable food business to McCormick will see existing shareholders retain a 65% stake in the newly formed company, with the American outfit controlling 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.”
