To make a sandwich for lunch, we use a number of ingredients. More than the filling, sauces play a crucial role as they activate our taste buds. Without these sauces, the sandwich will be bland and dry. Have you ever wondered that something as trivial as spices and sauces which you use in your everyday life can be worth a billion dollars? We have often come across business acquisition news worth millions and billions. But news about a business acquisition by the spice maker McCormick worth $4.2 billion is a little surprising. It seems that a number of ingredients from your kitchen cupboard are coming together for a business deal.
McCormick & Company is considered to be a global leader when it comes to ingredients that add flavor to your food. This spice maker is now acquiring a brand which excels in producing sauces. French’s Mustard, the food department of Reckitt Benckiser has signed an agreement with the spice maker for its acquisition. The official press release of this business acquisition came out on Tuesday. The net worth of this deal is $4.2 billion which will vary in the case of any customary purchase price adjustments. The monetary transaction of this deal will take place through a combination of equity and debt.
Details about this acquisition by McCormick
The sale of French’s Mustard was expected as in the month of April, its parent company had announced its strategic review. This means that the sauce maker was open to changes as long as it benefitted the company. The business acquisition will prove to be a progressive step for McCormick. This is because the deal will make this company a one-stop solution for all spices, sauces, condiments, and seasoning needs. The company’s chairman, Lawrence E. Kurzius stated that the company aims to provide a complete yet diverse flavor product offering to its consumers.
Market analysts believe that the $4.2 million value of this business acquisition is slightly higher than expected. But McCormick decided to take the plunge in order to make it self-sufficient in terms of flavors. After the sale of French’s Mustard, Reckitt Benckiser will concentrate on its other brands such as Mucinex cold medicine and Durex condoms. This deal will allegedly make McCormick the leader in the condiments field in the U.S. The transaction will be completed by the third or fourth quarter of the fiscal year of the company which ends in November.