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ACQUISITIONS
 3 Months Ended
Feb. 28, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITIONS ACQUISITIONS
Acquisitions are part of our strategy to increase sales and profits. The acquisition described below was recorded as a business combination with the excess of total consideration over the estimated fair value of assets acquired and liabilities assumed recorded as goodwill.
McCormick de Mexico
On January 2, 2026, we completed the acquisition of an additional 25% ownership interest in McCormick de Mexico from Grupo Herdez, for a purchase price of $750 million, which increases our ownership to a 75% controlling interest. McCormick de Mexico is a prominent food company in Mexico, with a broad portfolio, including mayonnaise, spices, marmalades, mustard, hot sauce, and tea, sold under McCormick brands. We believe the acquisition creates opportunities for further growth in the Mexican market and provides a strategic platform for further expansion in Latin America. The purchase of the additional 25% ownership interest was funded through a combination of cash on hand and commercial paper borrowings.
Prior to the acquisition of the additional ownership interest, we accounted for our 50% ownership interest in McCormick de Mexico as an equity method investment and recorded our proportional share of earnings as income from unconsolidated operations. The acquisition of the additional ownership interest resulted in the consolidation of McCormick de Mexico's financial results, which have been included as a component of our consumer and flavor solutions segments in our financial statements from the date of acquisition. The earnings attributable to the 25% ownership retained by Grupo Herdez are recorded as net income attributable to noncontrolling interests.
As a result of the consolidation, the carrying value of our previously held 50% ownership interest was remeasured to fair value resulting in a pre-tax and after-tax gain of $866.8 million which was recognized in Income from unconsolidated operations. The gain represents the remeasurement of our previously held 50% ownership interest over its carrying value at the date of acquisition, less $44.8 million previously recorded in Accumulated other comprehensive income primarily related to foreign currency translation adjustments. The fair value of the previously held equity interest was estimated based on a valuation derived from estimated fair value assessments and assumptions. This valuation was based on the implied value derived from the consideration transferred for the additional 25% ownership interest, adjusted for the control premium, and was supported by a market approach as well as an overall enterprise level discounted cash flow.
The following is a summary of the total consideration for the acquisition of the additional ownership interest in McCormick de Mexico (in millions):
Cash paid$750.0 
Effective settlement of preexisting amounts due to McCormick de Mexico(6.7)
Fair value of previously held equity interest1,008.0 
Total consideration$1,751.3 
The total consideration for the additional ownership interest in McCormick de Mexico was allocated to the underlying assets and liabilities based upon their preliminary estimated fair values at the date of acquisition. We estimated the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, and estimates made by management, which are subject to finalization. The following is a summary of the preliminary allocation of the total consideration which we expect to be finalized during the fiscal year ending November 30, 2026 (in millions):

Cash acquired$20.1 
Trade accounts receivable195.9 
Inventories123.4 
Other current assets36.5 
Property, plant and equipment53.0 
Intangible assets1,600.0 
Goodwill942.0 
Other long-term assets11.9 
Trade accounts payable(208.2)
Other current liabilities(47.8)
Deferred tax liabilities(468.3)
Other long-term liabilities(2.9)
Fair value of noncontrolling interest(504.3)
Net assets acquired$1,751.3 
We determined the carrying values of cash, trade receivables and payables, as well as certain other current and non-current assets and liabilities, represented the fair values. The property, plant and equipment fair value was preliminarily estimated using the replacement cost method.

Inventories acquired consist of raw materials and finished goods inventory that were valued using a net realizable value approach, which resulted in a step-up of $15.0 million that was recognized in cost of goods sold as the related inventory was sold.
Intangible assets include a reacquired right indefinite-lived intangible asset with an estimated fair value of $1,470.0 million and customer relationships with a weighted-average life of 15 years and an estimated fair value of $130.0 million. The reacquired right represents the value of McCormick's reacquisition of contractual rights previously granted to Grupo Herdez as part of the joint venture agreement giving McCormick de Mexico the perpetual and exclusive licensing right to sell specified McCormick branded products in Mexico. This right is expected to contribute cash flows for the foreseeable future and does not have substantive limiting factors. The fair value of the reacquired right was estimated using the multi-period excess earnings method of the income approach. The fair value of customer relationships was preliminarily estimated using the distributor method, a variation of the multi-purpose excess earnings method that uses distributor-based inputs for margins and contributory asset charges. Some of the more significant assumptions inherent in developing the estimated fair values included the estimated annual net cash flows for each intangible asset (including net sales, operating profit margin, and working capital/contributory asset charges), the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors. The assumptions used in the financial forecasts were determined using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management plans, and market comparables.
Goodwill, which represents the value associated with the expected synergies, acquired workforce and future growth opportunities anticipated to be realized as a combined company, is not deductible for tax purposes. Goodwill will be allocated to our consumer and flavor solutions segments when the allocation of the consideration to the acquired net assets is finalized.
Deferred tax liabilities primarily represent the expected future tax consequences of temporary differences between the fair value of the assets acquired and liabilities assumed and their tax bases.
The fair value of the noncontrolling interest was estimated based on a valuation derived from estimated fair value assessments and assumptions. This valuation was based on the implied value derived from the consideration transferred for the additional 25% ownership interest, adjusted for the control premium, and was supported by a market approach as well as an overall enterprise level discounted cash flow.
The Company transacts in the ordinary course of business with Grupo Herdez, a related party that owns a 25% noncontrolling interest in McCormick de Mexico. Contractual arrangements with Grupo Herdez include payments from McCormick de Mexico for (i) supervision and strategic management services based on a percentage of net sales of products registered under the McCormick brand and (ii) exclusive distribution services, including invoicing to customers, based on a percentage of net sales.
For the three months ended February 28, 2026, McCormick de Mexico incurred expenses of $32.7 million related to transactions with Grupo Herdez. As of February 28, 2026, accounts receivable included $228.8 million due from Grupo Herdez and accounts payable included $26.2 million due to Grupo Herdez.
Transaction and integration costs of $22.9 million were incurred during the three months ended February 28, 2026, of which $15.0 million were associated with the step-up of acquired inventory recognized in cost of goods sold.
For the three months ended February 28, 2026 McCormick de Mexico added $198.9 million to our net sales.
Supplemental Pro Forma Information
The following table presents unaudited supplemental pro forma consolidated net sales as if the McCormick de Mexico acquisition had occurred on December 1, 2024.
 Three months ended
 
 February 28, 2026
February 28, 2025
  
Net sales$1,960.5 $1,799.3 
The unaudited supplemental pro forma consolidated net sales gives effect to actual revenues prior to the McCormick de Mexico acquisition, adjusted to exclude the elimination of intercompany transactions. Other than the impact of the gain on remeasurement of previously held equity interest and transaction and integration costs (as discussed above), supplemental pro forma net earnings, assuming the McCormick de Mexico acquisition had occurred on December 1, 2024, would not be materially different from the results reported during the three months ended February 28, 2025 and 2026.
The unaudited pro forma information has been prepared for comparative purposes only, in accordance with the acquisition method of accounting, and is not necessarily indicative of the results of operations that would have occurred if the McCormick de Mexico acquisition had been completed on the date indicated, nor is it indicative of our future operating results.