Unilever’s food mashup is hardly a delectable prospect for shareholders

This ‘growth-led separation’ is an awkward, sprawling deal, far from the clean break some may have wished for

If Unilever shareholders thought the era of management-speak twaddle ended a few chief executives ago, say hello to their new partner in the food game. Brendan Foley, the boss of US spice and condiments firm McCormick, ran through the menu as he presented his big grab for Unilever’s Hellman’s-to-Knorr-to-Marmite food division. The logic, he explained, is all about “maximal adjacency”, “actionable growth levers” and “end-to-end flavour experiences”.

From the point of view of Unilever’s investors, the guff wouldn’t matter if McCormick were paying a fat price in a cash deal. But this $44.8bn transaction is not like that. Unilever will extract $15.7bn in cash but the bulk of the value is represented by the equity element. Unilever’s shareholders will end up owning 55% of an expanded McCormick and Unilever itself will have 10%. It is a very long way from being a clean break. In effect, the FTSE 100 firm is merging its food business with a smaller US firm that will take on oodles of debt to step up several leagues.