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Mergers and Acquisitions
 6 Months Ended
May 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITIONS MERGERS AND ACQUISITIONS
Acquisitions are part of our strategy to increase sales and profits. The McCormick de Mexico and Jurado acquisitions described below were recorded as business combinations 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 increased 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 loss 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 as of May 31, 2026, 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 equipment56.0 
Intangible assets1,600.0 
Goodwill939.9 
Other long-term assets11.9 
Trade accounts payable(208.2)
Other current liabilities(47.8)
Deferred tax liabilities(469.2)
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 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 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), a 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.
During the second quarter, we recorded immaterial adjustments to provisional amounts recognized at the acquisition date.
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 and six months ended May 31, 2026, McCormick de Mexico incurred expenses of $34.1 million and $66.8 million, respectively, related to transactions with Grupo Herdez. As of May 31, 2026, accounts receivable included $115.7 million due from Grupo Herdez and accounts payable included $15.4 million due to Grupo Herdez. For the three and six months ended May 31, 2026, we paid a dividend to Grupo Herdez in the amount of $8.4 million.
For the three and six months ended May 31, 2026, McCormick de Mexico added $204.8 million and $403.7 million, respectively, 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 May 31,Six months ended May 31,
 2026202520262025
Net sales$1,936.6 $1,869.7 $3,897.1 $3,669.0 
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 and six months ended May 31, 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.
Jurado
On March 31, 2025, we purchased substantially all of the assets of Jurado, Inc. (Jurado), supplier of chili mash located in Las Cruces, New Mexico. The purchase price for Jurado was $38.1 million and the determination of the fair value of the acquired Jurado assets was finalized during 2025. The results of Jurado’s operations have been included in our financial statements from the date of the acquisition and are not material.
Pending Merger with Unilever Foods Business
On March 31, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Unilever PLC (“Unilever”) to combine with the Unilever Foods business (“Unilever Foods”), a transaction that will create a global flavor leader in attractive and high-growth categories.
To facilitate the transaction, Unilever is expected to separate its Unilever Foods business, excluding its foods businesses in India, Nepal and Portugal, as well as its Lifestyle & Nutrition business, Buavita business and Lipton Ready-to-Drink business. Under the terms of the Merger Agreement, we will issue voting and non-voting securities to Unilever shareholders and Unilever in the same proportion as is currently held by our shareholders. The transactions contemplated by the Merger Agreement are expected to result in current Unilever shareholders owning approximately 55.1% of the combined company, our current shareholders owning approximately 35.0% of the combined company, and Unilever retaining up to approximately 9.9% of the total outstanding equity of the combined company, assuming Unilever does not elect to dispose of such interest to its shareholders in accordance with the Merger Agreement. Unilever will also receive a one-time $15.7 billion cash payment, subject to certain adjustments. The distribution of shares of Unilever Foods to Unilever’s shareholders and the pending transaction, taken together, are intended to qualify as a Reverse Morris Trust transaction that is generally tax-free to Unilever’s shareholders for U.S. federal income tax purposes, except to the extent that cash is paid to Unilever’s shareholders in lieu of fractional shares or Unilever elects to sell all or substantially all of the Unilever Foods assets operated in the United States to
McCormick or a subsidiary of McCormick in a transaction that is taxable for U.S. federal income tax purposes (the "U.S. Asset Sale Election").
The pending transaction is subject to the satisfaction or waiver of customary closing conditions, including the receipt of our shareholders' approval, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, obtaining certain other consents, authorizations, orders or approvals from governmental authorities, including certain other antitrust and any foreign investment approvals, and the effectiveness of a registration statement on Form S-4 to be filed by us.
We and Unilever each have termination rights under the Merger Agreement. A termination fee of $420 million may be payable by us to Unilever, upon termination of the Merger Agreement under specified circumstances, each as more fully described in the Merger Agreement.
In connection with the execution of the Merger Agreement, we entered into a commitment letter on March 31, 2026 (the "Bridge Commitment Letter") with Citigroup Global Markets Inc., Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc., (the "Commitment Parties") pursuant to which the Commitment Parties committed to provide, subject to the terms and conditions set forth therein, a 364-day senior unsecured bridge term loan credit facility (the "Bridge Facility") in an aggregate principal amount of up to $15.7 billion. See Note 4 for more information on the Bridge Facility.
The Bridge Commitment Letter also contemplates that we will seek to obtain permanent financing in the form of senior unsecured notes and/or senior unsecured term loans prior to the closing of the Merger (collectively, the “Permanent Financing”). Commitments under the Bridge Facility will be reduced by the amount of any Permanent Financing as well as the proceeds of certain asset sales and certain other events. The receipt of financing by us is not a condition to our obligation to consummate the pending transaction.